DeVry Education Group Inc. (DV): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


DeVry announced mixed fourth-quarter fiscal 2014 results beating the Zacks Consensus Estimate for earnings but marginally missing the same for revenues. However, earnings increased 35.2% year over year as revenues turned positive for the first time in 12 quarters. Lower costs and a lower tax rate also pulled up earnings. Overall, DeVry is a high quality company. Its diversified portfolio of programs, regular strategic acquisitions and turnaround efforts give it a competitive advantage. DeVry's revenues and earnings are being driven largely by its health care and international businesses. However, the core business the BTM segment accounting for half of the company's revenues, has been recording enrollment declines and low profits. We, therefore, prefer to remain Neutral on the stock until we see sustained enrollment growth and improved profitability at DeVry University, not expected even in fiscal 2015. The challenged regulatory environment also remains an overhang.


Headquartered in Downers Grove, IL, DeVry Education Group Inc. (DV) provides secondary and post-secondary education, primarily in the U.S., and also has operations in Canada, some Caribbean countries, Brazil, Europe, the Middle East and the Pacific Rim. The company's programs focus mainly on the fields of business, healthcare and technology. The company also serves accounting and finance professionals. The Illinois-based company is the parent company of American University of the Caribbean, Becker Professional Education, Carrington College and Carrington College California, Chamberlain College of Nursing, DeVry Brasil, DeVry University (including Keller Graduate School of Management) and Ross University. Founded in 1931, DeVry reports its operating results under three segments:

Business, Technology and Management: This is the company's flagship segment and includes operations of the company's largest subsidiary, DeVry University. DeVry University offers graduate and undergraduate courses, both onsite and online, in technology, science, business and arts. The degrees offered are bachelor's and master's degree. Graduate degree programs in management are offered through DeVry University's Keller Graduate School of Management.

Medical and Healthcare segment: The segment consists of Ross University Schools of Medicine and Veterinary Medicine, American University of the Caribbean School of Medicine (AUC), Chamberlain College of Nursing and Carrington Colleges.

International and Professional Education: This segment includes operation of Becker Professional Review and DeVry Brasil. DeVry Brasil, which operates in the northeast region of Brazil, offers undergraduate and graduate programs in the fields of business management, health, law and engineering through its six institutions Fanor, Ruy Barbosa, REA1, Faculdade Boa Viagem (FBV), Faculdade do Vale do Ipojuca (FAVIP) and Faculdade Differential Integral (Facid). While majority ownerships in Fanor, Ruy Barbosa and REA1 were acquired in 2009, FBV, FAVIP and Facid were acquired in Feb 2012, Sep 2012 and Jul 2013, respectively.

Becker Professional Review offers professional exam review and training programs for many popular certification examinations like Certified Public Accountant (CPA), Association of Chartered Certified Accountants (ACCA), Chartered Institute of Management Accountants (CIMA) and many more. The segment also includes operations of ATC International and Falcon Physician Reviews which were acquired in Apr 2011 and Apr 2012, respectively.

In Dec 2013, DeVry divested its underperforming Advanced Academics business (which provided customizable online learning solutions for middle and high school education) to, and formed a strategic partnership with, Connections Education/Pearson.

The students who attend DeVry University, Ross University, Chamberlain College of Nursing or Carrington Colleges can finance their education through a variety of sources, including government-sponsored financial aid including Title IV funds, scholarships, employer-provided tuition assistance, veteran's benefits and private loans. However, those undertaking Becker review courses cannot avail of federal or state financial aid.

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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 , Stocks

Referenced Stocks: CPA , ACCA , DV

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