Corinthian Colleges Inc. (COCO) has surprised on estimates the last 3 quarters in a row by an average of 25.09% as enrollment has soared. The company has both growth and value characteristics. It has a PEG ratio of just 0.7.
Company Description
Corinthian Colleges is a post-secondary education company that offers diploma programs and associates, bachelor’s and master’s degrees in many areas including healthcare, business, criminal justice, transportation technology, construction trades and information technology.
The company enrolls about 69,000 students at over 100 campuses within the United States and Canada.
Corinthian Aiming for 4 Surprises in a Row
The company is expected to report first quarter 2010 results on Oct 29. The Zacks Consensus Estimate has been holding at 27 cents in the last 60 days, up from 15 cents. The full year estimate also jumped in the last 2 months by 21 cents to $1.34 per share.
Analysts now expect year over year earnings growth in fiscal 2010 of 59.2% and with good reason, given the strong fourth quarter results.
In the fourth quarter, revenues climbed 29% to $353.5 million from $274 million from the year ago period. Total students rose 24.4% from the fourth quarter of 2008. The company acknowledged that the recession increased its growth momentum as more people sought out further education.
First Quarter Guidance
On Aug 25, when the company reported fourth quarter results, it also provided bullish guidance for the first quarter of 2010.
It expects student start growth of 15% to 17% compared to the first quarter a year ago. Revenues are forecast to range from $375 million to $385 million. Earnings per share are expected between 26 and 29 cents.
For the full year, it expects earnings per share of $1.30 to $1.36. Analysts are on the high side of the guidance, at $1.34. Will the company continue its earnings surprise streak?
Value Fundamentals
Corinthian Colleges is a Zacks #1 Rank (strong buy) stock. It is trading with a forward P/E of 12.68 and has a price-to-book ratio of 2.86. The company has a 5-year average return on equity (ROE) of 11.81%.
