One-glance verdict
Undervalued
$8.01 our estimate vs market $2.29
Wall Street consensus: $4.13 (-48.4% lower than our fair-value estimate)
71% below our estimate, below the bear case
Fundamentals snapshot
KinderCare Learning Companies, Inc.
KLC · NYQ · Consumer Defensive · Education & Training Services
Current price
$2.29
52-week range
$1.75 - $7.10
Market cap
$271.40M
Balance sheet
Distressed
2.19x Stretched
Net debt $2.34B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Revenue grew 0.1% last year.
- Reward Free cash flow was positive in 3/10 years.
- Risk Return on equity was -67.8% last year — the company lost money on shareholders' equity.
- Risk Operating margin compressed from 18.7% to 3.6% over 3 years.
What this company does
KinderCare Learning Companies, Inc.
KinderCare is one of the nation's largest providers of early education and daycare, operating centers like KinderCare and Champions after-school programs. The company makes money primarily from tuition fees paid by families, which creates a steady flow of recurring revenue (income that is predictable and likely to continue in the future). Because reliable childcare is an essential service for many working parents, the company serves a market with constant demand.
How the company got here
KinderCare was founded in 1969 by a real estate developer who saw a growing need for child care as more women entered the workforce. The company grew quickly, opening centers across the country and acquiring smaller competitors. After facing financial difficulties and filing for bankruptcy in the early 1990s, the company was acquired by a series of private investment firms. These changes led to a new focus on quality and a period of steady growth, eventually leading to the company becoming publicly traded on the New York Stock Exchange.
What it actually does
KinderCare provides early childhood education and care for children from six weeks to 12 years old. Think of them as a large, professionally managed network of daycare centers and before- and after-school programs. Parents pay tuition for their children to attend these programs, which offer structured learning and play in a safe environment. The company operates under a few different brand names and also partners with employers to offer child care benefits to their workers.
KinderCare Learning Centers and Crème de la Crème
This is the company's main and largest business, making up the vast majority of its revenue (the money it brings in from sales). These are the neighborhood learning centers that most people recognize, providing daycare and early education for infants, toddlers, and preschoolers. Parents pay tuition, usually on a monthly basis, for their children's enrollment. The Crème de la Crème brand is a more premium version of these centers, offering enhanced facilities and a wider variety of enrichment programs.
Champions
The Champions brand offers before- and after-school programs, as well as summer camps, for school-aged children, typically located right at elementary schools. This is a smaller but important part of the business that partners directly with school districts. Instead of just providing supervision, these programs focus on homework help, STEM activities, and other enrichment to complement the school day. Parents pay for these programs to ensure their children are in a safe and productive environment outside of regular school hours.
KinderCare for Employers
This part of the business, also known as KinderCare at Work, partners with companies to offer child care as a workplace benefit. This can include building and running a child care center on-site or near a company's office, or providing employees with discounted tuition at nearby KinderCare centers. Companies pay for these services to help them attract and keep good employees by making child care more accessible and affordable for their workforce. This segment also provides back-up care, which is an emergency child care service for employees when their regular arrangements fall through.
What management is betting on now
The company's current strategy focuses on filling more of the available spots in its existing centers to increase profitability. They are also focused on growing their employer-sponsored child care business, as more companies are looking to offer this benefit to their employees. Additionally, KinderCare is expanding its Champions before- and after-school programs by partnering with more school districts. Management is also investing in technology to make enrollment easier for parents and to manage their centers more efficiently.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$45.02M
FY2025 Q4
$-78.56M
FY2026 Q1
$75.08M
FY2026 Q2
$671.00K
FY2026 Q3
$62.60M
FY2026 Q4
$-28.09M
FY2027 Q1
$1.07M
FY2027 Q2
$45.41M
Revenue
$697.52M
Net income
$-8.77M
Diluted EPS
-0.07
Operating cash flow
$73.42M
Free cash flow
$45.41M
Fetching…
Sources
Revenue
$672.52M
Net income
$-289.83M
Diluted EPS
-2.45
Operating cash flow
$31.06M
Free cash flow
$1.07M
Fetching…
Sources
Revenue
$688.14M
Net income
$-177.18M
Diluted EPS
-1.50
Operating cash flow
$4.25M
Free cash flow
$-28.09M
Fetching…
Sources
Revenue
$676.83M
Net income
$4.55M
Diluted EPS
0.04
Operating cash flow
$100.79M
Free cash flow
$62.60M
Fetching…
Sources
Revenue
$700.11M
Net income
$38.59M
Diluted EPS
0.33
Operating cash flow
$35.05M
Free cash flow
$671.00K
Fetching…
Sources
Revenue
$668.24M
Net income
$21.16M
Diluted EPS
0.18
Operating cash flow
$98.44M
Free cash flow
$75.08M
Fetching…
Sources
Revenue
$646.96M
Net income
$-133.58M
Diluted EPS
-1.17
Operating cash flow
$-40.85M
Free cash flow
$-78.56M
Fetching…
Sources
Revenue
$671.48M
Net income
$13.96M
Diluted EPS
0.15
Operating cash flow
$86.68M
Free cash flow
$45.02M
Fetching…
Sources
Is it cheap or expensive?
Fair value $8.01 vs current price $2.29
Wall Street consensus is the average analyst price target: $4.13 (-48.4% lower than our fair-value estimate).
Our most-likely fair value is $8.01 a share — about 249.7% above today's price of $2.29, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $2.3B. Interest coverage 2.2x.
Net debt
$2.34B
Interest coverage
2.19x
KinderCare Learning Companies, Inc.'s profit covers its interest bill about 2.2 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
KLC
BASELINE
KinderCare Learning Companies, Inc.
Total debt $2.51B Interest coverage 2.19x This is the baseline the peer rows are being compared against.
Total debt $2.05B Interest coverage 7.03x +221% vs KLC Carries about 3.2x more debt cushion than KLC.
Total debt $545.98M Interest coverage 38.27x +1,647% vs KLC Carries about 17.5x more debt cushion than KLC.
Total debt $113.77M Interest coverage 34.88x +1,492% vs KLC Carries about 15.9x more debt cushion than KLC.
Total debt $153.47M Interest coverage 12.73x +481% vs KLC Carries about 5.8x more debt cushion than KLC.
Total debt $228.10M Interest coverage 8.54x +290% vs KLC Carries about 3.9x more debt cushion than KLC.
What you should know
The case for and against KLC
2 Rewards
2 Risks
Rewards
-
Revenue grew 0.1% last year.
-
Free cash flow was positive in 3/10 years.
Risks
-
Return on equity was -67.8% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from 18.7% to 3.6% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
9.97x
P/B
0.58x
P/S
0.10x
EV/EBITDA
11.20x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
20.0%
Operating margin
3.6%
Net margin
-17.2%
ROE
-67.8%
ROA
1.9%
Health
Liquidity and balance-sheet strength
Debt / equity
5.39x
Current ratio
0.74x
Quick ratio
0.64x
Total debt
$2.51B
Total cash
$174.45M
Growth
How the business has been compounding
Revenue TTM
$2.74B
Revenue 5Y CAGR
8.1%
EPS TTM
-3.98
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$209.53M
Free CF TTM
$110.26M
FCF margin
4.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
—