Capella’s (CPLA) strong focus towards working adults and exclusive online education has enabled it to establish a healthy position in the for-profit post-secondary education industry. The company’s sustained effort to expand educational programs helps it to boost enrollments, and in turn, the top-line.
Higher education sees a countercyclical movement during sluggish economic conditions. Furthermore, the company’s debt-free balance sheet and solid cash reserves bode well for future operating performance.
Although stiff competition from other online education providing companies remains a threat, we recommend an Outperform recommendation on the stock, given the company’s strong fundamentals. Our target price is currently $100 per share.Zacks Investment Research
