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Analyst Blog

On Apr 25, 2014, shares of DeVry Education Group Inc. (DV - Analyst Report) reached a 52-week high of $47.73, eventually closing at $45.99. The closing price represents a three-month return of around 0.32%.

Share Price Drivers

Share price of DeVry Education rose close to 14% in respose to solid third quarter fiscal 2014 results announcedon Apr 24. DeVry Education beat the Zacks Consensus Estimate for both revenues and earnings in the quarter.
 
Despite a year-over-year decline, adjusted earnings of 87 cents per share beat the Zacks Consensus Estimate by 16.0% in the third quarter of fiscal 2014.

Revenues of $496.1 million also beat the Zacks Consensus Estimate of $492 million, which, we believe, was due to strong sales at growth institutions like Chamberlain, Ross, Becker and DeVry Brasil.

The company’s total post-secondary enrollments across all its programs were up 1.7% driven by double-digit enrollment increase at the Chamberlain College of Nursing and DeVry Brasil.

Owing to increasing demand for nurses and physicians across the U.S., the company witnessed solid business in the Medical and Healthcare segment during the quarter. The segment reported a double-digit increase in revenue, driven by growing demand and campus expansions.  

Most encouragingly, this Zacks Rank #2 (Buy) education company witnessed improved enrollment levels in the quarter at the flagship college, DeVry University . DeVry University has been witnessing enrollment declines for the past few quarters as a result of overall economic downturn and lack of student confidence, which has reduced demand.
 
Both new and total enrollment decline at the university were narrower than the January session due to greater use of scholarships during the past several sessions.  
 
Most of the estimates for this stock moved up in the past 7 days, following the company’s solid third quarter results.  As a result, in the past 7 days, the Zacks Consensus Estimate for fourth quarter of fiscal 2014 increased 3.2% to 64 cents per share while that for fiscal 2014 increased 2.5% to $2.42 per share.

Another education company, Capella Education Co. (CPLA - Analyst Report) is expected to report first quarter 2014 earnings tomorrow i.e. Apr 29. The Zacks Consensus Estimate for Capella’s first quarter stands at 73 cents per share while that for 2014 is pegged at $2.95 per share.  

Other Stocks to Consider

Other stocks worth considering in the education sector include Apollo Education Group, Inc. (APOL - Analyst Report) and TAL Education Group (XRS - Snapshot Report). Both the companies carry a Zacks Rank #2.