ITT Educational Services, Inc.

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 $3.9 billion.

Earnings up 47%

ITT reported first-quarter results on Apr 23 that included a 47% spike in earnings per share. The educator made $1.59, beating Wall Street forecasts which averaged $1.42 and up from $1.08 last year.

Earnings were driven by strong enrollment figures. Currently more than 65,000 students are enrolled, up 21% from 54,000 last year.

Deal in Progress

On the same date ITT also announced a deal to acquire Daniel Webster College, a New Hampshire institution that has roughly 1,200 students. Financial terms were not discussed but the deal should close sometime in July.

Solid Value

Shares of ESI are trading at less that 13 times forward earnings. The growth rates, which are 37% for 2009 and 13% for 2010, are also trading at a good value. The PEG ratio is just 0.9, under the industry average of 1.2.

The Chart

Below you can see the excellent earnings history for ESI. The company as fallen short of estimates just one time in the past 5 years.

Read the full analyst report on ESI