Back to top

Analyst Blog

On Apr 4, 2014, we issued an updated research report on Strayer Education Inc. (STRA - Analyst Report).

On Feb 21, this post-secondary education provider reported strong fourth quarter 2013 results on the back of improvement in new enrollment trends. Despite declining year over year, Strayer Education beat the Zacks Consensus Estimate for both earnings and revenue in the quarter.

Strayer has been witnessing weak enrollment trends due to continued unemployment, overall economic downturn and subsequent decline in student demand. In order to address the concern, the board of trustees approved an approximate 20% cut in Strayer’s undergraduate tuition costs.

The new tuition fee has been put into from Jan 1, 2014. The initiative improved college affordability and its value proposition, and thus, attract cost-conscious students. The combination of lower undergraduate tuition fee and the Graduation Fund (which offer financial assistance to students in the final year of their programs) is expected to cut the cost of a Strayer University degree by 25%. In fact, the company’s enrolment trends have started improving lately.

In the fourth quarter of 2013, though undergraduate new enrollments declined, the rate of decline narrowed from the previous term. Moreover, this Zacks Rank #1 (Strong Buy) education company witnessed a double-digit increase in new graduate enrollment during the quarter, which is encouraging.

Revenue per student also grew in the quarter owing to higher student retention rate.
 
However, the company expects revenue per students to decline in each of the quarters of 2014 due to cuts in tuition costs – which keeps us concerned.

Key Picks from the Sector

Some other stocks in the education sector include Corinthian Colleges Inc. (COCO - Snapshot Report), K12, Inc. (LRN - Snapshot Report) and Apollo Education Group, Inc. (APOL - Analyst Report). While Corinthian Colleges sports a Zacks Rank #1, K12 and Apollo Education carry a Zacks Rank #2 (Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%