Capella Education Company
(
CPLA
), a leading provider of online post-secondary education, recently
announced that it has acquired the remaining interest in social
education company Sophia Learning, LLC.
Capella Education had acquired the majority interest in Sophia
Learning in January 2011. With the purchase of the remaining
shares, Capella Education now owns the entire company. The Sophia
site makes available free academic tutorials posted by hundreds of
teachers that are taught in a variety of ways. Around 5000 schools
and universities across 170 countries use the Sophia site.
Management believes the Sophia acquisition goes well with
Capella Education's long-term strategy of making higher education
accessible and reducing the cost of education.
Capella Education through its wholly owned subsidiary, Capella
University, provides online post-secondary education services in
the United States focused primarily on working adults. In addition,
the company also provides online education through Resource
Development International which provides UK University
qualifications online by distance learning.
Like most education companies, Capella is witnessing a fall in
enrollment. After falling 7.5% in the third quarter of 2011, total
active enrollment dropped 4.5% in the fourth quarter. Capella now
expects total enrollment to decline at a rate between 5% and 6% in
the first quarter of 2012.
Another education company,
Apollo Group
(
APOL
) released second quarter 2012 results in late March. The company
witnessed a 12.2% decrease in enrollment in the quarter and expects
new enrollment growth to remain volatile through the rest of fiscal
2012.
However,
American Public Education, Inc.
(
APEI
) witnessed a sharp 36% rise in enrollment in the fourth quarter of
2011. It expects first quarter 2012 net enrollment to rise between
20% and 22% over the prior-year period.
Our Recommendation
We currently have a long-term Neutral recommendation on Capella
Education. The stocks carry a Zacks #3 Rank (a short-term 'Hold'
rating).
AMER PUB EDUCAT (
APEI
): Free Stock Analysis Report
APOLLO GROUP (
APOL
): Free Stock Analysis Report
CAPELLA EDUCATN (
CPLA
): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment
Research