Investors seeking growth at a reasonable cost should explore UNIVERSAL TECHNICAL INSTITUT (NYSE:UTI).

UNIVERSAL TECHNICAL INSTITUT (NYSE:UTI) has caught the eye of our stock screener as an affordable growth stock. UTI is displaying robust growth metrics and also excels in terms of profitability, solvency, and liquidity. Additionally, it appears to be reasonably priced. Let's delve into the details.

Analyzing Growth Metrics

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. UTI has received a 7 out of 10:

• The Earnings Per Share has grown by an impressive 273.08% over the past year.
• UTI shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 28.35% yearly.
• The Revenue has grown by 14.70% in the past year. This is quite good.
• UTI shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 17.19% yearly.
• UTI is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.55% yearly.
• UTI is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.14% yearly.

How We Gauge Valuation for UTI

ChartMill assigns a proprietary Valuation Rating to each stock. The score is computed by evaluating various valuation aspects, like price to earnings and free cash flow, both absolutely as relative to the market and industry. UTI was assigned a score of 5 for valuation:

• Based on the Price/Forward Earnings ratio, UTI is valued a bit cheaper than the industry average as 60.27% of the companies are valued more expensively.
• Based on the Enterprise Value to EBITDA ratio, UTI is valued a bit cheaper than the industry average as 67.12% of the companies are valued more expensively.
• Based on the Price/Free Cash Flow ratio, UTI is valued a bit cheaper than 71.23% of the companies in the same industry.
• The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
• The decent profitability rating of UTI may justify a higher PE ratio.
• A more expensive valuation may be justified as UTI's earnings are expected to grow with 17.55% in the coming years.

ChartMill's Evaluation of Health

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For UTI, the assigned 6 for health provides valuable insights:

• An Altman-Z score of 3.40 indicates that UTI is not in any danger for bankruptcy at the moment.
• The Altman-Z score of UTI (3.40) is better than 78.08% of its industry peers.
• The Debt to FCF ratio of UTI is 1.62, which is an excellent value as it means it would take UTI, only 1.62 years of fcf income to pay off all of its debts.
• With an excellent Debt to FCF ratio value of 1.62, UTI belongs to the best of the industry, outperforming 83.56% of the companies in the same industry.
• A Debt/Equity ratio of 0.42 indicates that UTI is not too dependend on debt financing.

Profitability Insights: UTI

ChartMill utilizes a Profitability Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of profitability ratios and margins, both in absolute terms and in comparison to industry peers. UTI has earned a 7 out of 10:

• With an excellent Return On Assets value of 7.13%, UTI belongs to the best of the industry, outperforming 80.82% of the companies in the same industry.
• With an excellent Return On Equity value of 19.20%, UTI belongs to the best of the industry, outperforming 84.93% of the companies in the same industry.
• The Return On Invested Capital of UTI (9.34%) is better than 83.56% of its industry peers.
• The last Return On Invested Capital (9.34%) for UTI is above the 3 year average (5.11%), which is a sign of increasing profitability.
• UTI's Profit Margin of 7.08% is fine compared to the rest of the industry. UTI outperforms 69.86% of its industry peers.
• UTI's Profit Margin has improved in the last couple of years.
• With a decent Operating Margin value of 9.50%, UTI is doing good in the industry, outperforming 72.60% of the companies in the same industry.
• UTI's Operating Margin has improved in the last couple of years.

More Affordable Growth stocks can be found in our Affordable Growth screener.

Check the latest full fundamental report of UTI for a complete fundamental analysis.

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.