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Grand Canyon Education, Inc. (LOPE) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Grand Canyon Education (LOPE - Free Report) ? Shares have been on the move with the stock up 5.3% over the past month. The stock hit a new 52-week high of $121.6 in the previous session. Grand Canyon Education has gained 11.5% since the start of the year compared to the 13.4% move for the Zacks Consumer Discretionary sector and the 11.5% return for the Zacks Schools industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 16, 2023, Grand Canyon Education reported EPS of $2.36 versus consensus estimate of $2.25.
For the current fiscal year, Grand Canyon Education is expected to post earnings of $6.39 per share on $950 million in revenues. This represents a 7.21% change in EPS on a 4.25% change in revenues.
Valuation Metrics
While Grand Canyon Education has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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.
Grand Canyon Education has a Value Score of B. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 18X. On a trailing cash flow basis, the stock currently trades at 16.4X versus its peer group's average of 8.2X. Additionally, the stock has a PEG ratio of 1.23. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Grand Canyon 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 (Buy) and Style Scores of A or B, it looks as if Grand Canyon Education fits the bill. Thus, it seems as though Grand Canyon Education shares could have a bit more room to run in the near term.
How Does LOPE Stack Up to the Competition?
Shares of LOPE have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Stride, Inc. (LRN - Free Report) . LRN has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Stride, Inc. beat our consensus estimate by 11.21%, and for the current fiscal year, LRN is expected to post earnings of $2.51 per share on revenue of $1.79 billion.
Shares of Stride, Inc. have gained 36.8% over the past month, and currently trade at a forward P/E of 17.46X and a P/CF of 9.09X.
The Schools industry is in the top 10% of all the industries we have in our universe, so it looks like there are some nice tailwinds for LOPE and LRN, even beyond their own solid fundamental situation.
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Grand Canyon Education, Inc. (LOPE) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Grand Canyon Education (LOPE - Free Report) ? Shares have been on the move with the stock up 5.3% over the past month. The stock hit a new 52-week high of $121.6 in the previous session. Grand Canyon Education has gained 11.5% since the start of the year compared to the 13.4% move for the Zacks Consumer Discretionary sector and the 11.5% return for the Zacks Schools industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 16, 2023, Grand Canyon Education reported EPS of $2.36 versus consensus estimate of $2.25.
For the current fiscal year, Grand Canyon Education is expected to post earnings of $6.39 per share on $950 million in revenues. This represents a 7.21% change in EPS on a 4.25% change in revenues.
Valuation Metrics
While Grand Canyon Education has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? 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.
Grand Canyon Education has a Value Score of B. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 18.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 18X. On a trailing cash flow basis, the stock currently trades at 16.4X versus its peer group's average of 8.2X. Additionally, the stock has a PEG ratio of 1.23. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Grand Canyon 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 (Buy) and Style Scores of A or B, it looks as if Grand Canyon Education fits the bill. Thus, it seems as though Grand Canyon Education shares could have a bit more room to run in the near term.
How Does LOPE Stack Up to the Competition?
Shares of LOPE have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Stride, Inc. (LRN - Free Report) . LRN has a Zacks Rank of # 1 (Strong Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Stride, Inc. beat our consensus estimate by 11.21%, and for the current fiscal year, LRN is expected to post earnings of $2.51 per share on revenue of $1.79 billion.
Shares of Stride, Inc. have gained 36.8% over the past month, and currently trade at a forward P/E of 17.46X and a P/CF of 9.09X.
The Schools industry is in the top 10% of all the industries we have in our universe, so it looks like there are some nice tailwinds for LOPE and LRN, even beyond their own solid fundamental situation.