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Strayer's (STRA) NYCDA New Payment Model to Attract Students
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The New York Code + Design Academy (“NYCDA”), part of Strayer Education, Inc. (STRA - Free Report) , introduced an income share agreement payment model, wherein students pay incrementally for their courses after getting a job.
NYCDA is a technology school providing hands-on training programs in web development and user interface design. As people are increasingly using their mobiles and computers for everyday transactions, demand for professionals trained to develop web and mobile apps has been increasing. The Jan 2016 acquisition of NYCDA enables Strayer to capitalize on this demand. The introduction of web and mobile app development courses appeals to students who intend to upgrade their skills to match the demand in the job market, thereby making significant contribution to Strayer’s top line.
Model Details
Under the new model, students need to pay only if they earn a minimum of $40,000 annually, post the completion of their course.
Thereafter, they are required to pay 8% of their monthly income to cover the basic price of the program, up to a maximum of 48 monthly payments, without any interest.
Rationale Behind
For-profit education companies have been grappling with several issues, one of them being the reluctance in students to take up loans for pursuing a higher degree. Many students are ending up incurring a debt as they are not being able to get a job.
Hence, such interest-free programs can be expected to draw students, thereby driving overall growth for Strayer.
Another major issue is the lack of technological skills among U.S. employees and job aspirants. NYCDA aims at bridging the gap between “the open computer programming jobs available in America and the students with the talent, passion, and work ethic to fill those jobs.”
Stock Price Movement
Shares of Strayer have lost 1.5% year to date, underperforming the 41% growth of the industry to which it belongs. Estimates for this Zacks Rank #4 (Sell) stock moved down 4.8% for the current year while that for the next year fell 7.1% over the last 30 days.
Stocks to Consider
A few better-ranked stocks in the industry include K12 Inc (LRN - Free Report) , Grand Canyon Education, Inc. (LOPE - Free Report) and Bright Horizons Family Solutions Inc. (BFAM - Free Report) .
All three companies carry a Zacks Rank #2 (Buy). Fiscal 2018 earnings for K12 are expected to increase 11.1%. Full-year 2017 earnings for Bright Horizons will likely increase 22.9% while that of Grand Canyon are expected to rise 20.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early
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Strayer's (STRA) NYCDA New Payment Model to Attract Students
The New York Code + Design Academy (“NYCDA”), part of Strayer Education, Inc. (STRA - Free Report) , introduced an income share agreement payment model, wherein students pay incrementally for their courses after getting a job.
NYCDA is a technology school providing hands-on training programs in web development and user interface design. As people are increasingly using their mobiles and computers for everyday transactions, demand for professionals trained to develop web and mobile apps has been increasing. The Jan 2016 acquisition of NYCDA enables Strayer to capitalize on this demand. The introduction of web and mobile app development courses appeals to students who intend to upgrade their skills to match the demand in the job market, thereby making significant contribution to Strayer’s top line.
Model Details
Under the new model, students need to pay only if they earn a minimum of $40,000 annually, post the completion of their course.
Thereafter, they are required to pay 8% of their monthly income to cover the basic price of the program, up to a maximum of 48 monthly payments, without any interest.
Rationale Behind
For-profit education companies have been grappling with several issues, one of them being the reluctance in students to take up loans for pursuing a higher degree. Many students are ending up incurring a debt as they are not being able to get a job.
Hence, such interest-free programs can be expected to draw students, thereby driving overall growth for Strayer.
Another major issue is the lack of technological skills among U.S. employees and job aspirants. NYCDA aims at bridging the gap between “the open computer programming jobs available in America and the students with the talent, passion, and work ethic to fill those jobs.”
Stock Price Movement
Shares of Strayer have lost 1.5% year to date, underperforming the 41% growth of the industry to which it belongs. Estimates for this Zacks Rank #4 (Sell) stock moved down 4.8% for the current year while that for the next year fell 7.1% over the last 30 days.
Stocks to Consider
A few better-ranked stocks in the industry include K12 Inc (LRN - Free Report) , Grand Canyon Education, Inc. (LOPE - Free Report) and Bright Horizons Family Solutions Inc. (BFAM - Free Report) .
All three companies carry a Zacks Rank #2 (Buy). Fiscal 2018 earnings for K12 are expected to increase 11.1%. Full-year 2017 earnings for Bright Horizons will likely increase 22.9% while that of Grand Canyon are expected to rise 20.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early
See Zacks' 3 Best Stocks to Play This Trend >>