Why Universal Technical Institute Stock Crushed it This Week

Universal Technical Institute (NYSE: UTI) stock barreled into July on a high note. The educational services company announced an important managerial appointment, and was the subject of a bullish new analyst move. Across the holiday-shortened week, its stock rose by nearly 18%, according to data compiled by S&P Global Market Intelligence.

Bullish pundit says buy

Just before said week kicked into gear, Truist Securities pundit Jasper Bibb significantly raised his price target on UTI's shares Monday morning. He now feels they are worth $47 apiece, nearly 20% over his previous fair value assessment of $40. In making the change, he kept his buy recommendation intact.

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Bibb noted several positive factors for UTI in his update, according to reports. Basing his new take on an investor call with company COO Todd Hitchcock, the analyst wrote that changes in the labor market from the proliferation of artificial intelligence (AI) functionalities should benefit UTI (AI is set to displace white-collar workers, but not those who labor in many of the trades the company provides training for).

The analyst also pointed to UTI's recent expansion efforts, with two new campuses in its lineup. The first, located in San Antonio, Texas, concentrates on blue-collar skills and opened in late March. The other, Concorde-Glendale in Arizona (managed by its Concorde Career Colleges unit), focuses on healthcare and medical training and should open next year.

Speaking of the latter facility, UTI named its campus president on Wednesday. This is Mark Garland, who has several decades of experience in education. Most recently, he served as campus president at The College of Health Care Professionals in Dallas, Texas, for over three years.

A healthy student body

Of the two developments, I find the second more meaningful. Concorde-Glendale represents a significant expansion into other educational areas for UTI -- and into high-demand professions that should help bolster a healthcare industry that will need to expand to service an increasingly aging U.S. population.

This company seems to be taking full advantage of this notable opportunity, which makes its stock worth considering.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.