Shares of Strayer Education, Inc. (STRA - Free Report) declined 8.07% on Jul 27, after the education company reported disappointing second-quarter 2016 results despite positive enrollment levels.
Second quarter 2016 adjusted earnings of 72 cents per share missed the Zacks Consensus Estimate of $1.04 by 30.8%. Moreover, adjusted earnings decreased 35% year over year due to weak revenues and margins.
Total revenue of $108.5 million missed the Zacks Consensus Estimate of $114.0 million by 4.8%. In spite of an increase in total enrollment, revenues fell 1% from the comparable prior-year quarter due to lower revenue per student.
Adjusted operating margin decreased 720 basis points (bps) to 11.9% due to weak revenues and higher expenses. Bad debt expense, as a percentage of revenues, was 3.8% in the second quarter, reflecting a year-over-year increase of 60 bps owing to slower payment from corporate alliances partner.
Enrollment & Revenue Per Student
Strayer University’s total enrollment rose 4% to 38,813 students for the summer term driven by a 4% increase in continuing student enrollments, and a 6% increase in new enrollment.
Revenue per student decreased 2% during the quarter owing to an unfavorable shift in mix to lower tuition undergraduates.
Other Financial Details
Strayer Education ended the quarter with cash and cash equivalents of $117.4 million, as of Jun 30, 2016, compared with $117.5 million, as of Mar 31, 2016. The company had $70 million of share repurchase authorization remaining as of Jun 30, 2016.
Strayer Education carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in the consumer discretionary sector include Apollo Education Group Inc , New Oriental Education & Technology Group Inc. (EDU - Free Report) and Barnes & Noble Education Inc (BNED - Free Report) . All the three companies hold a Zacks Rank #2 (Buy).
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Shares of Strayer Education, Inc. (STRA - Free Report) declined 8.07% on Jul 27, after the education company reported disappointing second-quarter 2016 results despite positive enrollment levels.
Second quarter 2016 adjusted earnings of 72 cents per share missed the Zacks Consensus Estimate of $1.04 by 30.8%. Moreover, adjusted earnings decreased 35% year over year due to weak revenues and margins.
Total revenue of $108.5 million missed the Zacks Consensus Estimate of $114.0 million by 4.8%. In spite of an increase in total enrollment, revenues fell 1% from the comparable prior-year quarter due to lower revenue per student.
Adjusted operating margin decreased 720 basis points (bps) to 11.9% due to weak revenues and higher expenses. Bad debt expense, as a percentage of revenues, was 3.8% in the second quarter, reflecting a year-over-year increase of 60 bps owing to slower payment from corporate alliances partner.
Enrollment & Revenue Per Student
Strayer University’s total enrollment rose 4% to 38,813 students for the summer term driven by a 4% increase in continuing student enrollments, and a 6% increase in new enrollment.
Revenue per student decreased 2% during the quarter owing to an unfavorable shift in mix to lower tuition undergraduates.
Other Financial Details
Strayer Education ended the quarter with cash and cash equivalents of $117.4 million, as of Jun 30, 2016, compared with $117.5 million, as of Mar 31, 2016. The company had $70 million of share repurchase authorization remaining as of Jun 30, 2016.
Strayer Education carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked stocks in the consumer discretionary sector include Apollo Education Group Inc , New Oriental Education & Technology Group Inc. (EDU - Free Report) and Barnes & Noble Education Inc (BNED - Free Report) . All the three companies hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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