KinderCare Learning Cos Inc "Some Stability but Still Work in Progress"

研报英文原文证据摘录

KinderCare Learning Cos Inc "Some Stability but Still Work in Progress"

footprint currently, and anticipates ultimately closing more than the usual ~1% of

centers in 2026. This mirrors steps taken by BFAM with both companies potentially

having negative net center counts in 2026. We believe the catalyst for this scrutiny

includes new management as well as some traction in re-regaining enrollment at

certain low-occupancy centers, which puts pressure on the other centers not

seeing similar improvements.

Closures not included in guide. Due to the ongoing nature of this initiative,

KLC is not including the incremental center closures (beyond the typical ~1%) in

2026 guidance. Accordingly, when the initiative is finalized, we would anticipate a

negative impact on 2026 revenue with a greater impact on 2027 from the

closures. Interestingly, given that these centers are running at losses, it's likely the

EBITDA profile of the company could improve. We think the closures are likely

necessary from a financial perspective, and will result in a higher-margin, more

successful company overall. However, the closures also illustrate the ongoing

challenges in the childcare industry.

Raising EBITDA Estimates

2026E: We’re increasing our 2026 adjusted EBITDA estimate to $220m from

$208m, reflecting the Q1 upside and also a stronger Q2 EBITDA versus our prior

estimate.

2027E: We're increasing our 2027 adjusted EBITDA estimate to $235m from

$220m.

Valuation:

Our $5 PT (from $3) is based on a 6X (from 5X) EV/EBITDA multiple applied to our NTM

+1 (twelve months ending March 2028) EBITDA estimate of $239m (was $220m). The

increase in our target multiple represents some stability in the company’s revenue/

earnings trajectory evidenced by the slight Q1 upside and slight raise to 2026 guidance,