Back to top

Analyst Blog

Capella Education Company (CPLA - Analyst Report), a leading provider of online post-secondary education, recently announced that it has acquired the remaining interest in social education company Sophia Learning, LLC.

Capella Education had acquired the majority interest in Sophia Learning in January 2011. With the purchase of the remaining shares, Capella Education now owns the entire company. The Sophia site makes available free academic tutorials posted by hundreds of teachers that are taught in a variety of ways. Around 5000 schools and universities across 170 countries use the Sophia site.

Management believes the Sophia acquisition goes well with Capella Education’s long-term strategy of making higher education accessible and reducing the cost of education.

Capella Education through its wholly owned subsidiary, Capella University, provides online post-secondary education services in the United States focused primarily on working adults. In addition, the company also provides online education through Resource Development International which provides UK University qualifications online by distance learning.

Like most education companies, Capella is witnessing a fall in enrollment. After falling 7.5% in the third quarter of 2011, total active enrollment dropped 4.5% in the fourth quarter. Capella now expects total enrollment to decline at a rate between 5% and 6% in the first quarter of 2012.

Another education company, Apollo Group (APOL - Analyst Report) released second quarter 2012 results in late March. The company witnessed a 12.2% decrease in enrollment in the quarter and expects new enrollment growth to remain volatile through the rest of fiscal 2012.

However, American Public Education, Inc. (APEI - Analyst Report) witnessed a sharp 36% rise in enrollment in the fourth quarter of 2011. It expects first quarter 2012 net enrollment to rise between 20% and 22% over the prior-year period.

Our Recommendation

We currently have a long-term Neutral recommendation on Capella Education. The stocks carry a Zacks #3 Rank (a short-term ‘Hold’ rating).

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%