We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Strategic Education (STRA) Down 5.8% Since Last Earnings Report: Can It Rebound?
Read MoreHide Full Article
A month has gone by since the last earnings report for Strategic Education (STRA - Free Report) . Shares have lost about 5.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Strategic Education due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Strategic Education, Inc. or SEI reported second-quarter 2021 results, wherein the company’s earnings missed analyst expectations while revenues surpassed the same. On a year-over-year basis, earnings declined but revenues improved.
Chief Executive Officer of SEI, Karl McDonnell, said, "We are pleased with performance at Capella University and in our Alternative Learning and Australia/New Zealand segments and continue to focus on returning Strayer University to growth. Our financial strength provides a solid foundation as we continue to invest in Australia/New Zealand, Alternative Learning, and the success of our Capella and Strayer students."
Inside The Headlines
SEI reported adjusted earnings of $1.55 per share, which marginally missed the Zacks Consensus Estimate of $1.56 per share and decreased 24.8% from the year-ago quarter. The downside was primarily due to the issuance of new shares to facilitate the acquisition of Torrens University and associated assets in Australia and New Zealand.
Total revenues of $299.2 million surpassed the consensus estimate of $299 million by 0.3% and grew 16.9% from the prior-year level. Adjusted revenues, which excluded the impact of a purchase accounting adjustment and foreign currency exchange, grew 16.5% year over year to $298.1 million.
Segment Details
SEI currently operates in three reportable segments: U.S. Higher Education or USHE, Alternative Learning and Australia/New Zealand or ANZ. The U.S. Higher Education or USHE segment comprises Strayer University, including the Jack Welch Management Institute and DevMountain, Capella University, and Hackbright Academy.
Segment’s revenues fell 14.2% year over year to $212.2 million owing to lower enrollment and revenue-per-student. Total enrollment declined 9.9% from the year-ago level to 83,923 students. FlexPath enrollment was 18% of USHE enrollment versus 12% in the same period of 2020. The segment’s operating margin contracted 870 basis points (bps) to 15.1% for the quarter.
The Alternative Learning segment includes Employer Solutions, Workforce Edge, Sophia Learning and Digital Enablement Partnerships.
The segment’s quarterly revenues came in at $12.9 million, reflecting 52.2% year-over-year growth backed by higher Sophia Learning subscriptions and employer affiliated enrollment. Employer affiliated enrollment was 20.5% of USHE enrollment compared with 17.2% in the year-ago period. Its adjusted operating margin came in at 40.1% for the reported quarter, 970 bps down from 49.8% a year ago.
The Australia/New Zealand or ANZ segment includes Torrens University, Think Education and Media Design School.
Revenues from the segment totaled $74.1 million and adjusted revenues, excluding the impact of a purchase accounting adjustment and foreign currency exchange, were $72.9 million. Adjusted operating income was $16.5 million and 22.6% of adjusted revenue for the reported period.
Operating Highlights
Adjusted operating margin of 18% was down 660 bps from the year-ago figure of 24.6%. Adjusted EBITDA for the reported quarter was $71.9 million, down 7.5% from $77.7 million in the prior-year period.
Financial Details
As of Jun 30, 2021, it had cash and cash equivalents of $261.6 million, up from $187.5 million at 2020-end.
Cash provided by operating activities was $125.8 million in the first six months of 2021 compared with $111.9 million in the comparable year-ago period. Capital expenditures were $23.1 million compared with $25.5 million a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Strategic Education has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Strategic Education has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Strategic Education (STRA) Down 5.8% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Strategic Education (STRA - Free Report) . Shares have lost about 5.8% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Strategic Education due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Strategic Education (STRA - Free Report) Q2 Earnings Lag, Revenues Top
Strategic Education, Inc. or SEI reported second-quarter 2021 results, wherein the company’s earnings missed analyst expectations while revenues surpassed the same. On a year-over-year basis, earnings declined but revenues improved.
Chief Executive Officer of SEI, Karl McDonnell, said, "We are pleased with performance at Capella University and in our Alternative Learning and Australia/New Zealand segments and continue to focus on returning Strayer University to growth. Our financial strength provides a solid foundation as we continue to invest in Australia/New Zealand, Alternative Learning, and the success of our Capella and Strayer students."
Inside The Headlines
SEI reported adjusted earnings of $1.55 per share, which marginally missed the Zacks Consensus Estimate of $1.56 per share and decreased 24.8% from the year-ago quarter. The downside was primarily due to the issuance of new shares to facilitate the acquisition of Torrens University and associated assets in Australia and New Zealand.
Total revenues of $299.2 million surpassed the consensus estimate of $299 million by 0.3% and grew 16.9% from the prior-year level. Adjusted revenues, which excluded the impact of a purchase accounting adjustment and foreign currency exchange, grew 16.5% year over year to $298.1 million.
Segment Details
SEI currently operates in three reportable segments: U.S. Higher Education or USHE, Alternative Learning and Australia/New Zealand or ANZ.
The U.S. Higher Education or USHE segment comprises Strayer University, including the Jack Welch Management Institute and DevMountain, Capella University, and Hackbright Academy.
Segment’s revenues fell 14.2% year over year to $212.2 million owing to lower enrollment and revenue-per-student. Total enrollment declined 9.9% from the year-ago level to 83,923 students. FlexPath enrollment was 18% of USHE enrollment versus 12% in the same period of 2020. The segment’s operating margin contracted 870 basis points (bps) to 15.1% for the quarter.
The Alternative Learning segment includes Employer Solutions, Workforce Edge, Sophia Learning and Digital Enablement Partnerships.
The segment’s quarterly revenues came in at $12.9 million, reflecting 52.2% year-over-year growth backed by higher Sophia Learning subscriptions and employer affiliated enrollment. Employer affiliated enrollment was 20.5% of USHE enrollment compared with 17.2% in the year-ago period. Its adjusted operating margin came in at 40.1% for the reported quarter, 970 bps down from 49.8% a year ago.
The Australia/New Zealand or ANZ segment includes Torrens University, Think Education and Media Design School.
Revenues from the segment totaled $74.1 million and adjusted revenues, excluding the impact of a purchase accounting adjustment and foreign currency exchange, were $72.9 million. Adjusted operating income was $16.5 million and 22.6% of adjusted revenue for the reported period.
Operating Highlights
Adjusted operating margin of 18% was down 660 bps from the year-ago figure of 24.6%. Adjusted EBITDA for the reported quarter was $71.9 million, down 7.5% from $77.7 million in the prior-year period.
Financial Details
As of Jun 30, 2021, it had cash and cash equivalents of $261.6 million, up from $187.5 million at 2020-end.
Cash provided by operating activities was $125.8 million in the first six months of 2021 compared with $111.9 million in the comparable year-ago period. Capital expenditures were $23.1 million compared with $25.5 million a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Strategic Education has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Strategic Education has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.