Capella Education Company
) is set to report its first-quarter 2014 results on Apr 29
before the market opens. Last quarter, it reported 3.95% positive
surprise. Let's see how things are shaping up for this
Factors to Consider This Quarter
For first quarter 2014, Capella Education expects new enrollments
to increase slightly year over year. However, total enrollment is
expected to dip 1.5% to 2.5% in the quarter owing to weak student
starts in the prior quarter and quarterly variations in
The company has been witnessing fluctuating enrollment trends in
the last few quarters, which in turn dampened total enrollments,
revenues, cash flow and profitability. This trend is expected to
continue in the upcoming quarter. In fact, revenues are expected
to remain flat to down 1.0% year over year in the quarter.
Operating margin is expected in the range of 14% to 15% for the
first quarter, lower than 15.8% in fourth quarter 2013.
However, owing to Capella's relationship and brand-driven
marketing strategy and initiatives to improve learner success
rates, total enrollment growth is expected to turn positive in
the latter half of 2014. The company expects to achieve moderate
new enrollment growth and operating margin improvement in 2014.
Our proven model does not conclusively show that Capella
Education is likely to beat earnings this quarter. That is
because a stock needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here, as you will see below.
Capella's Earnings ESP is 0.00%.
Capella Education carries a Zacks Rank #3 (Hold) which when
combined with a 0.00% ESP makes surprise prediction difficult. We
caution against stocks with Zacks Ranks #4 and 5 (Sell-rated
stocks) going into the earnings announcement, especially when the
company is seeing negative estimate revisions momentum.
Other Stocks to Consider
Here are some other companies you may consider, as our model
shows they have the right combination of elements to post an
earnings beat this quarter:
DeVry Education Group Inc.
), with Earnings ESP of +14.06% and a Zacks Rank #2 (Buy).
Royal Caribbean Cruises Ltd.
), with Earnings ESP of +1.92% and a Zacks Rank #2.
), with Earnings ESP of +2.27% and a Zacks Rank #3.
CAPELLA EDUCATN (CPLA): Free Stock Analysis
DEVRY EDUCATION (DV): Free Stock Analysis
FASTENAL (FAST): Free Stock Analysis Report
ROYAL CARIBBEAN (RCL): Free Stock Analysis
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