Strayer Education

Strayer Education Inc. (STRA - Analyst Report) surged a few weeks ago in response to a government report. The company has done well maintaining the higher share price and is seeing bullish Zacks Consensus Estimates ahead of reporting later this month.

Company Description

Strayer Education provides higher education for working adults, offering undergraduate and graduate degree programs in business administration, accounting, information technology, education, health care and public administration to approximately 46,000 working adult students at 71 campuses in 15 states and Washington, D.C. and worldwide via the Internet.

Bullish Projections and a Share Price Surge

The company continues to see higher earnings forecasts. The current full-year Zacks Consensus Estimate of $7.50 per share was increased from the 3 months-ago level of $7.27.

For 2010, the Zacks Consensus Estimate stands at $9.25 per share, up from the $8.88 over the past 3 months.

In the second-quarter report, Strayer noted that solid summer enrollment figures led to a third-quarter earnings guidance that ranged between $1.14 to $1.16 per share.

In response, the Zacks Consensus Estimate for the third quarter shot up to $1.16 per share from the 3 months-ago forecast of $1.05.

Third-quarter results are scheduled for release on Oct 29.

Shares of STRA surged recently on a Government Accountability Office (GAO) report on proprietary schools. The report offered mild criticism on the for-profit college-level schools sector, while investors had feared more severe criticism.

A Solid Second Quarter

For the second-quarter, STRA saw earnings of $2.00 per share, topping the previous year’s $1.50 and exceeding the Zacks Consensus Estimate by 2%. Revenues jumped 29% year-over-year to $125.9 million thanks to a boost in enrollment and a 5% rise in tuition.

Stellar Fundamentals

Strayer continues to boast a solid balance sheet, showing no debt. The company’s return on equity (ROE) of 56% squashes the industry average of 16%. Strayer’s net profit margin of 21%, more than doubles the industry average of 9%. STRA also pays an industry-leading dividend yield of 1%.

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