Capella Education Co. (CPLA)
by Zacks Equity ResearchMay 23, 2012 | Comments : 0 Recommended this article: (0)
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The company has been witnessing volatile enrollment growth since the last few quarters due to challenging market conditions. The company's brand-driven marketing strategy is not leading to a desired improvement in enrollments. Increased marketing spend associated with the strategy also remains a drag on margins.
The company provided a weak near-term enrollment outlook, forcing us to reduce our estimates for both 2012 and 2013. Moreover, the highly regulated nature of post-secondary education in the US also remains a consistent overhang. We have therefore downgraded our rating on the stock from Neutral to Underperform.
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