On Mar 25, Zacks Investment Research downgraded
Lincoln Educational Services Corp.
) to a Zacks Rank #5 (Strong Sell), following announcement of
disappointing fourth quarter 2013 results and a bleak guidance
for the upcoming first quarter 2014.
Why the Downgrade?
Despite beating the Zacks Consensus Estimate, Lincoln Educational
posted wider loss than the year ago quarter. The company has been
witnessing weak enrollment growth for some time. The company also
closed five of its campuses, as of Dec 31, 2013 and it expects
this trend to continue in 2014.
Lincoln Educational's fourth quarter 2013 adjusted earnings of 14
cents declined 41.7% year over year due to high single-digit
decline in the top line.
Revenues of $88.5 million lagged the Zacks Consensus Estimate of
$91 million by 2.7% and declined 8.8% year over year to $88.5
million. The decline in revenues was due to an 11.6% drop in
student enrollment resulting from student uncertainty over debt.
The student starts declined 7.2% year over year during the
The company expects the soft trend of top line to continue in
first quarter 2014. The revenue is expected to range from $77
million to $79 million, which represents a year over year decline
of 10.9%. Net loss per share is expected to range from 57 cents
to 60 cents, which is significantly wider than the prior year
loss of 17 cents. However, the student starts are expected to
rise in the range of 1% to 3% year over year.
A couple of other education companies, witnessing weak enrollment
trends in the last reported quarter are
Universal Technical Institute, Inc.
Apollo Education Group Inc.
Other Stocks to Consider
Investors interested in the education sector can also consider
Strayer Education Inc.
), which sports a Zacks Rank #1 (Strong Buy).
APOLLO GROUP (APOL): Free Stock Analysis
LINCOLN EDUCATL (LINC): Free Stock Analysis
STRAYER EDUC (STRA): Free Stock Analysis
UNIVL TECH INST (UTI): Free Stock Analysis
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