Grand Canyon's Growth Continuesby Todd Young | 11-04-09 | 9:34AM |
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Print Article Grand Canyon Education LOPE reported strong third-quarter results that were in line with our expectations. However, the company issued an impressive 2010 outlook that was above our expectations. We are placing our fair value estimate under review while we update our assumptions. Grand Canyon continues to see strong demand for its educational services. Furthermore, it is leveraging its cost structure with the help from various tail winds the economy is creating. Enrollment at the end of September stood at 34,200 students, an increase of 56% from last year. This helped boost third-quarter revenue 68% year over year. Additionally, management expects enrollment to be 47,000-49,000 students at the end of 2010. This is an expected 11,000-13,000 increase from the 36,000 students the company expects to have by the end of this year (about 1,800 additional students compared with September enrollment). Strong growth, coupled with a favorable advertising environment and increased enrollment counselor productivity, should give the company solid operating margin expansion next year as the weak economy helps keep costs and turnover low. The operating margin in the third quarter, excluding a one-time litigation settlement charge, was 18% compared with 7% last year. For the nine-month period, the margin improved to 18% from 8%.
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Analyst Notes
09-04-09 | 2:36PM Grand Canyon, Bridgepoint Stocks Fall
08-04-09 | 11:50AM Grand Canyon Reports Solid Results
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