DeVry Group Shows Improving Trends - Analyst Blog

By
A A A

On Mar 10, 2014, we issued an updated research report on DeVry Education Group Inc. ( DV ).

DeVry turned around from a weak first quarter by beating the Zacks Consensus Estimate for both revenues and earnings in the second quarter of fiscal 2014. The second quarter results were announced on Feb 4. However, both revenues and earnings declined year over year as strong growth in the healthcare and international businesses was offset by yet another revenue decline at the struggling flagship DeVry University due to enrollment shortfall.

DeVry has been witnessing persistent enrollment declines, mainly at DeVry University, as a result of overall economic downturn and lack of student confidence which has reduced demand.


However, though enrollments have been declining, the rate of decline is narrowing due to management's turnaround plan that includes new scholarship programs and other operational initiatives (like a tuition freeze for 2013-2014 and strategic use of scholarships). Further, management expects starts to improve at DeVry University in March.

DeVry's diversified portfolio of programs, regular strategic acquisitions and a debt-free balance sheet give it a competitive advantage. The company is also witnessing continued strength in its health care and international businesses. Moreover, the performance improvement plan to align costs, regain enrollment growth and make growth investments is yielding positive results.

However, the company needs to show a sustained enrollment growth at DeVry University, accounting for 50% of revenues; not expected at least in 2014. The continued challenged regulatory environment also remains a persistent overhang.

Key Picks from the Sector

DeVry carries a Zacks Rank #3 (Hold). Other better-ranked stocks in the education sector include Strayer Education Inc. ( STRA ), Apollo Education Group, Inc. ( APOL ) and TAL Education Group ( XRS ). All the three stocks enjoy a Zacks Rank #1 (Strong Buy).



APOLLO GROUP (APOL): Free Stock Analysis Report

DEVRY EDUCATION (DV): Free Stock Analysis Report

STRAYER EDUC (STRA): Free Stock Analysis Report

TAL EDUCATN-ADR (XRS): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: APOL , DV , STRA , XRS

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

22,256,507
  • $114.30 ▲ 2.04%
17,240,736
  • $7.40 ▼ 2.63%
17,086,798
  • $18.03 ▲ 0.28%
15,480,361
  • $7.48 ▲ 3.03%
13,908,112
  • $8.29 ▲ 5.07%
12,952,138
  • $94.072 ▲ 3.05%
11,722,137
  • $69.54 ▲ 4.71%
10,534,589
  • $10.675 ▲ 3.54%
As of 12/26/2014, 02:54 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com