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Career Education (CECO) Hits Fresh Highs: Is There Still Room to Run?
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Have you been paying attention to shares of Career Education (CECO - Free Report) ? Shares have been on the move with the stock up 11.7% over the past month. CECO hit a new 52-week high of $16.58 in the previous session. Career Education has gained 33.4% since the start of the year compared to the 8.3% move for the Consumer Discretionary sector and the 10.8% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 2, 2018, Career Education reported EPS of $0.25 versus the Zacks Consensus Estimate of $0.22.
For the current fiscal year, Career Education is expected to post earnings of $0.95 per share on $587.2 million in revenues. This represents a 206.45% change in EPS on a -1.55% change in revenues. For the next fiscal year, the company is expected to earn $1.16 per share on $613.8 million in revenues. This represents a year-over-year change of 22.11% and 4.53%, respectively.
Valuation Metrics
Career Education may be at a 52-week high right now, but what might the future hold for CECO? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Career Education has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 31.1X versus its peer group's average of 20.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Career Education currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 and Style Scores of A or B, it looks as if Career Education fits the bill. Thus, it seems as though CECO shares could still be poised for more gains ahead.
How Does Career Education Stack Up to the Competition?
Shares of Career Education have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including Strayer Education (STRA - Free Report) , Grand Canyon Education (LOPE - Free Report) , and Weight Watchers International (WTW - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 40% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CECO, even beyond its own solid fundamental situation.
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Career Education (CECO) Hits Fresh Highs: Is There Still Room to Run?
Have you been paying attention to shares of Career Education (CECO - Free Report) ? Shares have been on the move with the stock up 11.7% over the past month. CECO hit a new 52-week high of $16.58 in the previous session. Career Education has gained 33.4% since the start of the year compared to the 8.3% move for the Consumer Discretionary sector and the 10.8% year-to-date return for its peer group.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 2, 2018, Career Education reported EPS of $0.25 versus the Zacks Consensus Estimate of $0.22.
For the current fiscal year, Career Education is expected to post earnings of $0.95 per share on $587.2 million in revenues. This represents a 206.45% change in EPS on a -1.55% change in revenues. For the next fiscal year, the company is expected to earn $1.16 per share on $613.8 million in revenues. This represents a year-over-year change of 22.11% and 4.53%, respectively.
Valuation Metrics
Career Education may be at a 52-week high right now, but what might the future hold for CECO? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Career Education has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 17X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 31.1X versus its peer group's average of 20.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Career Education Corporation Price and Consensus
Career Education Corporation Price and Consensus | Career Education Corporation Quote
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Career Education currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 and Style Scores of A or B, it looks as if Career Education fits the bill. Thus, it seems as though CECO shares could still be poised for more gains ahead.
How Does Career Education Stack Up to the Competition?
Shares of Career Education have been rising, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including Strayer Education (STRA - Free Report) , Grand Canyon Education (LOPE - Free Report) , and Weight Watchers International (WTW - Free Report) , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.
The Zacks Industry Rank is in the top 40% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CECO, even beyond its own solid fundamental situation.