Career Education Corporation (CECO) continues to make the rotten economy work in its favor as revenue and student population jumped by double digits in 2009. CECO has a price-to-book ratio of 2.53.
Company Description
Career Education provides higher education in the form of doctoral, master’s, bachelor’s, associate degrees and certificate programs through 90 campuses and the worldwide web in the U.S., France, Italy, and the United Kingdom.
Its brands include the American InterContinental University, Brooks Institute, Harrington College of Design and the Le Cordon Bleu North America. 40% of its students attend web-based virtual campuses.
Career Education Beats by 125% in the Fourth Quarter
Higher education is hot due to the recession and high unemployment rates. On Feb 17, for the third quarter in a row, Career Education easily beat the Zacks Consensus Estimate when it surprised by 40 cents a share. Earnings per share were 72 cents compared to the Zacks Consensus of 32 cents.
Revenue also jumped by 19.4% to $507.8 million from $425.3 million in the fourth quarter of 2008. For the year, revenue climbed 10.6% to $1.84 billion from $1.66 billion in 2008.
As we’ve seen with other higher education companies, enrollment soared.
As of Jan 31, 2010, total student population was up 21% to 116,800 from 96,600 as of Jan 31, 2009. On-line students jumped 27% to 46,200 from 36,300. Health Education saw the largest increase, adding 32% more students in 2009.
Zacks Consensus Estimates Jump
Career Education didn’t offer any guidance in its earnings press release. But analysts are clearly optimistic about the first quarter of 2010 and the full year.
The first quarter Zacks Consensus rose 6 cents in the last week to 55 cents as 4 estimates were raised.
For 2010, the Zacks Consensus leaped 14.2% in the prior 7 days to $2.25 from $1.97 per share with 8 estimates moving up in that time period.
Value Fundamentals
Career Education is a Zacks #1 Rank (strong buy) stock. With its low P/E ratio of just 13.32 and expected 2010 earnings growth of 18.82%, Career Education is trading with a PEG ratio of just 0.93.
The company also has a stellar 5-year average return on equity (ROE) of 15.04%.