LGCY

Legacy Education is a genuinely high-quality small-cap compounder. Revenue has nearly doubled in two years ($35.5M FY23 → $46.0M FY24 → $64.2M FY25, +39.5% last year), and profitability scaled with it: operating income +60.6% to $9.99M and net income +47.3% to $7.53M, lifting operating margin to 15.6% and net margin to 11.7%. The balance sheet is pristine for a growth company — $20.3M cash against just $1.4M total debt (long-term $481K + current $925K), liabilities/equity of only 0.69x, and $7.77M of operating cash flow (up 371%) that dwarfs $844K of capex. An 18.4% ROE on that under-levered base is impressive. At $11.69 the stock trades at 19.8x FY EPS and 2.3x sales — undemanding against ~40% revenue and ~47% earnings growth, giving a PEG well below 1.

The one number that tempers the enthusiasm is the gap between net income (+47.3%) and diluted EPS (+11.3%). Net income surged but per-share growth was less than a third of that, indicating the weighted diluted share count climbed materially during the year (consistent with a recent public listing). Investors buy per-share economics, not headline net income, so the true growth an owner captured is closer to 11% — still solid, but it reframes the P/E from 'dirt cheap' to 'fair-to-attractive.' Further issuance would keep diluting that gap.