Not financial advice, not telling you to buy anything. I own shares, so grain of salt.
Quick version: AI datacenters need electricians and HVAC guys. America doesn't have enough of them. LINC is a trade school company that trains exactly those guys, and business is booming.
The numbers:
- Q1 revenue up 22.5%, EBITDA up 85%. They raised guidance after the quarter.
- Management is targeting \~$150M EBITDA by 2030 vs \~$78M this year. Basically a double. I think this is conservative.
Why now:
Workforce Pell went live July 1. Federal grant money for short-term trades programs, and for-profit schools qualify for the first time. Most of LINC's current programs are too long to qualify yet, but they've said they're looking at restructuring some to fit. Even before that kicks in, the government naming electricians and HVAC as national priorities (it's literally in the AI Action Plan) tells you which way the wind is blowing.
The bear case is basically "it's expensive." Yeah, \~21x EBITDA isn't cheap and not a lot of FCF. But they're plowing all their cash into new campuses, which is why FCF looks bad, and every campus they've opened has worked. Shorting a company for reinvesting in a business that's compounding 20%+ is a choice.
Funny thing: the shorts already tried this on the datacenter contractors. FIX went up 230% and they covered. PWR, same. So they moved down the food chain and shorted the schools instead. LINC is now \~9% of float short with 4.7 days to cover, the highest of any name in this whole space. Small float too. Earnings are \~Aug 10. If it's another quarter like Q1, that's a crowded theater with one door. Not my main thesis, but it's sitting right there.
Positions: long shares. Do your own DD.