Career Education Corp (CECO) continues to please investors by topping expectations and setting new highs. With rising estimates flowing in, shares of CECO are maintaining solid valuations.
Company Description
Career Education has more than 116,000 students enrolled at its 90 campuses in the U.S. and Europe. They operate schools like Le Cordon Bleu College of Culinary Arts, International Academy of Design & Technology and several others.
Estimates Trending Higher
Analysts continue to raise their outlook for Career Education, most notably in their full-year estimates. The Zacks Consensus Estimate for 2010 is up 68 cents, to $2.65 in the past 2 months.
Estimates for 2011 are averaging $3.16, which is 97 cents higher in that period of time. If Career Education reaches these levels, year-over-year growth will be 40% this year and another 19% next year.
I love seeing estimates rising into an earnings announcement, which is coming up on May 5.
Solid Earnings History
Career Education’s latest earnings report yielded its third consecutive surprise. Earnings per share came in at 72 cents, more than double Wall Street’s expectations.
Revenues increased more than 19% to $508 million in the final period of 2009. Along with the excellent results, the CEO provided a very optimistic outlook for the “next level of growth” for the company.
Educators Making the Grade
Earlier this week Credit Suisse upgraded some for-profit educators, although, the industry has been soaring for some time now. As unemployment remains high companies like Career Education have more potential students enrolling, resulting in excellent growth rates for both the top and bottom lines.
Valuations
Not only does this Zacks Rank #1 have an excellent earnings story, but shares of CECO are trading with good valuations as well. The Forward P/E is less than 13 times.
Career Education’s PEG ratio comes in at 1.0, meaning the growth rates are fairly priced.
The Chart
Shares of CECO were stagnating after setting the latest 52-week high. However we saw a nice jump on the industry news and are now regaining momentum. The MACD is on the very of producing a momentum-based buy signal.
Bill Wilton is the Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Growth Trader service Zacks Investment Research
