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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#3436
Positioning
Market Dominance
Services
Personal Services
$822M
John T. Wyatt
We are the largest private provider of high-quality early childhood education and care services (“ECE”) in the United States by center capacity. We are a mission driven organization, rooted in a commitment to providing all children with the very best start in life. We serve children ranging from 6 weeks to 12 years of age across our market leading footprint of 1,490 early childhood education centers with capacity of more than 195,000 children and contracts for more than 650 before- and after-school sites located in 40 states and the District of Columbia as of October 2, 2021. We were originally formed as KC Holdco, LLC, a Delaware limited liability company. In connection with this offering and the Reorganization, we will convert into a Delaware corporation pursuant to a statutory conversion and will be renamed KinderCare Learning Companies, Inc. Our principal executive office is located at 650 NE Holladay, Suite 1400, Portland, OR.
Headcount
—
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = KLC ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$YALA Yalla Group Ltd | 75 | 89 | 99 | 80 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$GRVY GRAVITY Co., Ltd. | 75 | 82 | 96 | 71 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ISSC INNOVATIVE SOLUTIONS & SUPPORT INC | 73 | 81 | 88 | 94 | 25.0x | 14.1x | 17.1% | 10.3% | 35.5% | 14.6% | 10.1% | 105.2% | 0.0% | 41.0x | $244M | VS | |
$AER AerCap Holdings N.V. | 72 | 60 | 87 | 84 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$HCSG HEALTHCARE SERVICES GROUP INC | 72 | 74 | 88 | 88 | 7.1x | 6.1x | 28.9% | 20.8% | 20.8% | 9.9% | 9.3% | 8.5% | 0.0% | 1.0x | $1.2B | VS | |
$LQDT LIQUIDITY SERVICES INC | 72 | 90 | 88 | 68 | 24.9x | 14.3x | 14.1% | 8.3% | 45.7% | 8.5% | 6.2% | 28.1% | 0.0% | 0.0x | $736M | VS | |
$TRTNpA Triton International Ltd | 71 | 70 | 89 | 70 | - | 1.7x | 0.0% | - | 97.4% | 58.0% | 37.4% | - | 8.8% | 264.0x | $2.5B | VS | |
$EDU New Oriental Education & Technology Group Inc. | 71 | 83 | 52 | 77 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$NTES NetEase, Inc. | 71 | 88 | 93 | 68 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$UTI UNIVERSAL TECHNICAL INSTITUTE INC | 70 | 86 | 86 | 72 | 43.2x | 16.0x | 15.3% | 5.8% | 100.0% | 6.9% | 5.2% | 15.1% | 0.0% | 24.0x | $1.8B | VS | |
$KLC KinderCare Learning Companies, Inc. | 41 | 39 | 62 | 20 | 5.7x | 4.8x | 9.3% | 2.2% | 59.9% | 6.9% | 3.1% | 1.3% | 0.0% | 100.0x | $822M | ||
| SECTOR BENCH | - | - | - | - | - | 23.7x | 11.7x | 5.7% | 2.4% | 64.6% | 4.5% | 2.8% | 8.6% | 0.0% | 0.3x | - | REF |
KinderCare Learning Companies, Inc. (KLC) receives a "Reduce" rating with a composite score of 40.9/100. It ranks #3436 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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HQ Base
Pending Verification
Lagging peers — losers tend to keep underperforming
Trading at a discount to fundamentals — favorable entry valuation
Average quality profile
Average volatility — neutral timing signal
Moderate investment profile
Mid-range overall rating
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Relative valuation derived from Services sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for KLC.
View All Ratings| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 39 | 32 | +7ALPHA |
| MOMENTUM | 20 | 13 | +7ALPHA |
| VALUATION | 62 | 70 | -8DRAG |
| INVESTMENT | 45 | 79 | -34DRAG |
| STABILITY | 43 | 42 | +1NEUTRAL |
| SHORT INT | 51 | 54 | -3NEUTRAL |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 1.7% vs WACC 4.2% (spread -2.5%)
GM 60% vs sector 65%, OM 7% vs sector 5%
Capital turnover 0.90x
Rev growth 1%, 3yr history
Interest coverage 1.1x, Net debt/EBITDA 12.4x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate KinderCare Learning Companies, Inc. (KLC) as a Reduce with a composite score of 40.9/100 at a current price of $3.73. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
KinderCare Learning Companies, Inc. holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 40.9/100 places it at rank #3436 in our full universe.
No Moat
High
Poor
Undervalued
Gross margins of 60% signal strong pricing power.
Stable competitive position in a defensive sector.
Weak momentum suggests persistent institutional selling pressure.
Vulnerability to macroeconomic shocks and interest rate volatility.
KinderCare Learning Companies, Inc. represents a reduce based on multi-factor quantitative performance.
KinderCare Learning Companies, Inc. receives a Reduce rating from our analysis, with a composite score of 40.9/100 and 2 out of 5 stars, ranking #3436 out of 7,333 stocks. KLC's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
KLC's quality score of 39/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 9.3% (sector avg: 5.7%), gross margins of 59.9% (sector avg: 64.6%), net margins of 3.1% (sector avg: 2.8%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
KLC's value score of 62/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 5.73x, an EV/EBITDA of 4.80x, a P/B ratio of 0.53x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
With an investment score of 45/100, KLC exhibits moderate growth-oriented spending. Key growth metrics include revenue growth of 1.3% vs. a sector average of 8.6% and a return on assets of 2.2% (sector: 2.4%). The company appears to be balancing growth investments with capital returns, though the pace of investment may not be enough to accelerate top-line growth meaningfully.
KinderCare Learning Companies, Inc. is experiencing notably weak momentum with a score of just 20/100. The stock has underperformed its peers and is trending below major moving averages. Revenue growth stands at 1.3% year-over-year, while a beta of 1.23 reflects its sensitivity to broader market moves. While deep momentum weakness can occasionally present value opportunities, it often reflects deteriorating fundamentals or structural headwinds that may persist.
KLC's stability score of 43/100 signals elevated volatility and/or leverage concerns. Key stability metrics include a beta of 1.23 and a debt-to-equity ratio of 100.00x (sector avg: 0.3x). Investors should be prepared for wider-than-average price swings and consider position sizing accordingly to manage portfolio risk.
The short interest score of 51/100 for KLC suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include above-average market sensitivity (beta: 1.23), elevated leverage (D/E: 100.00x), small-cap liquidity risk. With a $822M market cap (small-cap), KinderCare Learning Companies, Inc. may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
KinderCare Learning Companies, Inc. is a small-cap company in the Services sector, ranked #0 of 50 in its sector (100th percentile) and #3436 of 7,333 overall (53rd percentile). Key comparisons include ROE of 9.3% exceeding the 5.7% sector median and operating margins of 6.9% above the 4.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Services peers.
While KLC currently exhibits a REDUCE profile, superior opportunities exist within the SERVICES sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Services Alpha →Quant Factor Profile
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Improvement in Momentum (20) would have the largest impact on the composite score.
EV/EBITDA 59% BELOW SECTOR MEDIAN (FAVORABLE)
ROE 61% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 7% BELOW SECTOR MEDIAN
Above 50MA
37.18%
Net New Highs
+51081
The Schall Law Firm filed a class action lawsuit against KinderCare Learning Companies for alleged securities fraud related to false statements about child safety and regulatory compliance during its 2024 IPO.
KinderCare Learning Companies is facing a class action lawsuit alleging false and misleading statements about the quality of child care, with potential securities law violations during its October 2024 IPO.
Law Offices of Frank R. Cruz is alerting KinderCare Learning Companies shareholders about a securities fraud class action lawsuit, alleging the company misled investors about child care quality and safety during its 2024 IPO.
LAKE OSWEGO, Ore., February 19, 2026--KinderCare Learning Companies, Inc. (NYSE: KLC) ("KinderCare"), a leading provider of high-quality early childhood education, today announced it will release its fourth quarter and full year 2025 financial results after market close on Thursday, March 12, 2026. Management will host a conference call on the day of the release at 5:00 pm ET to discuss the results.
LAKE OSWEGO, Ore., February 19, 2026--Child care has overtaken retirement benefits as one of the most important workplace benefits for working parents, according to new data from KinderCare Learning Companies, Inc. (NYSE: KLC) ("KinderCare"). Findings from the seventh annual KinderCare Confidence Index, conducted with The Harris Poll, reveal that parents increasingly prioritize child care as essential to productivity, retention and loyalty. The KinderCare Confidence Index is one of the nation’s