ITT Educational Services, Inc.

ITT Educational Services, Inc. (ESI - Analyst Report) shares are rebounding sharply with the optimism in the market lately. Estimates are up and shares are trading at a relative value.

Company Description

ITT Educational Services provide career-focused degree programs, with an emphasis on technology. The company has over 100 locations across the United States and currently have approximately 62,000 students enrolled in classes. Each location is nationally accredited by the U.S. Department of Education. ITT carries a market cap of $4.9 billion.

Class is in Session

When ITT announced its year-end results on Jan 22 it included a 29.2% jump in new student enrollment for the fourth quarter. 14,911 new students signed up for classes compared to the 11,542 in the fourth quarter of 2007.

Quarterly earnings per share received a nice boost, up 34% to $1.61, up from $1.20 in the comparable period last year. The higher earnings came on increased enrollment and a 21.4% increase in revenues, now $280 million.

ITT has now surprise in each of its past 10 quarterly announcement. The most recent report of $1.61 was 12% higher than the consensus of $1.44.

Optimistic Outlook

In the same report Kevin Modany, President and CEO said, "As a result of our terrific performance in the fourth quarter and optimistic outlook regarding the operating environment in 2009, we have set our internal goal for 2009 EPS in the range of $6.25 to $6.45."

Estimates Rising

Analyst estimates for 2009 are up 12 cents over the past month and now average $6.62. The 2010 estimates are up 22% to $7.66, from $6.27, since the announcement. These projections are good enough for 28% growth in 2009 and another 16% in 2010.

Share are also priced at a discount relative to the industry. ITT's P/E ratio is 22 times earnings while its peers average 17 times.

The Chart

Shares of ESI are rebounding after the most recent market sell off. For those looking at other momentum based indicators, the MACD has crossed the signal line signal line. Take a look at the chart below.

Email	Print	Share	RSS	Rate Pos	Rate Neg	Comment