Back to top

Analyst Blog

Capella Education Company (CPLA - Analyst Report) is set to report its first-quarter 2014 results on Apr 29 before the market opens. Last quarter, it reported 3.95% positive surprise. Let’s see how things are shaping up for this announcement.

Factors to Consider This Quarter

For first quarter 2014, Capella Education expects new enrollments to increase slightly year over year. However, total enrollment is expected to dip 1.5% to 2.5% in the quarter owing to weak student starts in the prior quarter and quarterly variations in re-registrations.

The company has been witnessing fluctuating enrollment trends in the last few quarters, which in turn dampened total enrollments, revenues, cash flow and profitability. This trend is expected to continue in the upcoming quarter. In fact, revenues are expected to remain flat to down 1.0% year over year in the quarter. Operating margin is expected in the range of 14% to 15% for the first quarter, lower than 15.8% in fourth quarter 2013.

However, owing to Capella’s relationship and brand-driven marketing strategy and initiatives to improve learner success rates, total enrollment growth is expected to turn positive in the latter half of 2014. The company expects to achieve moderate new enrollment growth and operating margin improvement in 2014.

Earnings Whisper?

Our proven model does not conclusively show that Capella Education is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP:  Capella’s Earnings ESP is 0.00%.  

Zacks Rank: Capella Education carries a Zacks Rank #3 (Hold) which when combined with a 0.00% ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Here are some other companies you may consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:  

DeVry Education Group Inc. (DV - Analyst Report), with Earnings ESP of +14.06% and a Zacks Rank #2 (Buy).

Royal Caribbean Cruises Ltd. (RCL - Analyst Report), with Earnings ESP of +1.92% and a Zacks Rank #2.

Fastenal Co. (FAST - Analyst Report), with Earnings ESP of +2.27% and a Zacks Rank #3.

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

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 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
UNITED THER… UTHR 116.59 +27.16%
TRIQUINT SE… TQNT 20.72 +6.80%
CENTURY ALU… CENX 26.00 +5.67%
VASCO DATA… VDSI 14.84 +5.17%
TESLA MOTOR… TSLA 275.00 +4.22%