Grand Canyon (LOPE) Hits Fresh Highs: Is There Still Room to Run?

Have you been paying attention to shares of Grand Canyon EducationLOPE ? Shares have been on the move with the stock up 7.3% over the past month. LOPE hit a new 52-week high of $112.94 in the previous session. Grand Canyon Education has gained 23.2% since the start of the year compared to the 2.1% move for the Consumer Discretionary sector and the 18.7% year-to-date return for its peer group.

What's Driving the Outperformance?

The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 2, 2018, Grand Canyon Education reported EPS of $1.52 versus the Zacks Consensus Estimate of $1.39 while it beat the consensus revenue estimate by 0.59%.

For the current fiscal year, Grand Canyon Education is expected to post earnings of $4.83 per share on $1.06 billion in revenues. This represents a 21.97% change in EPS on an 8.4% change in revenues. For the next fiscal year, the company is expected to earn $5.28 per share on $1.15 billion in revenues. This represents a year-over-year change of 9.39% and 8.53%, respectively.

Valuation Metrics

Grand Canyon Education may be at a 52-week high right now, but what might the future hold for LOPE? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.

Grand Canyon Education has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of B.

In terms of its value breakdown, the stock currently trades at 22.8X current fiscal year EPS estimates. On a trailing cash flow basis, the stock currently trades at 21.7X versus its peer group's average of 19.5X. Additionally, the stock has a PEG ratio of 1.57. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Grand Canyon Education, Inc. Price and Consensus

Grand Canyon Education, Inc. Price and Consensus | Grand Canyon Education, Inc. Quote

Zacks Rank

We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Grand Canyon Education currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 and Style Scores of A or B, it looks as if Grand Canyon Education passes the test. Thus, it seems as though LOPE shares could have potential in the weeks and months to come.

How Does Grand Canyon Education Stack Up to the Competition?

Shares of Grand Canyon Education have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? Some of its industry peers are also solid potential picks, including Career Education CECO , Strayer Education STRA , and Weight Watchers International WTW , all of which currently have a Zacks Rank of at least #2 and a VGM Score of at least B, making them well-rounded choices.

However, it is worth noting that the Zacks Industry Rank for this group is in the bottom half of the ranking, so it isn't all good news for Grand Canyon Education. Still, the fundamentals for LOPE are promising, and it still has potential despite being at a 52-week-high.

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Grand Canyon Education, Inc. (LOPE): Free Stock Analysis Report

Strayer Education, Inc. (STRA): Free Stock Analysis Report

Career Education Corporation (CECO): Free Stock Analysis Report

Weight Watchers International Inc (WTW): Free Stock Analysis Report

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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 Nasdaq, Inc.

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

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