Perdoceo Education Corporation PRDO is scheduled to report second-quarter 2020 results on Aug 6, after the closing bell.
In the last reported quarter, the company’s earnings and revenues beat the Zacks Consensus Estimate by 13.5% and 5.2%, respectively. On a year-over-year basis, its earnings and revenues grew 16.7% and 8.3% from the prior year, respectively.
Perdoceo’s earnings topped the consensus mark in all the last four quarters, with the average surprise being 24.5%.
Trend in Estimate Revision
The Zacks Consensus Estimate for earnings for the quarter to be reported has been unchanged over the past 30 days to 37 cents per share. The said figure indicates a 5.1% decrease from the year-ago earnings of 39 cents per share. However, the consensus mark for revenues is $175.2 million, suggesting 12% year-over-year growth.
Career Education Corporation Price and EPS Surprise
Factors to Note
Student enrollment growth at both the universities — CTU and AIU — is expected to have aided Perdoceo to generate higher second-quarter revenues. Particularly, CTU has been experiencing solid new enrollment growth, reflecting sustained levels of prospective student interest, which was well served by its student support infrastructure. CTU maintained the corporate partnership program during the quarter. It has been coordinating with the existing partners to best serve their students during COVID-19-led uncertain times.
Also, the acquisition of Trident University International in March is expected to have further contributed to AIU’s top line. The academic calendar at AIU, specifically the number of enrollment days in any given quarter, had a significant impact on new student enrollments in the quarter. As a result of this timing impact, the company expects new enrollments at AIU to register significant growth in the second quarter, primarily as a result of 50% more enrollment days and the Trident acquisition.
Furthermore, the company has been transitioning students and employees to a remote environment. It continued to strategically invest to further enhance and improve the company’s technological capabilities that enabled its staff to better serve and support students amid this pandemic situation.
However, incremental investments in marketing and student-serving functions, along with costs associated with the company’s compliance monitoring efforts are expected to have weighed on the bottom line.
Overall, it expects adjusted operating income in the range of $38-$40 million, indicating an increase from $32.8 million reported a year ago. The company also expects adjusted earnings per share in the range of 36-38 cents, suggesting an increase from 34 cents in the prior year.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Perdoceo this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: It currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks Worth a Look
Here are some companies in the Zacks Consumer Discretionary sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Callaway Golf Company ELY has an Earnings ESP of +222.5% and a Zacks Rank #3, at present.
Acushnet Holdings Corp. GOLF has an Earnings ESP of +180.01% and a Zacks Rank of 3.
Vista Outdoor Inc. VSTO has an Earnings ESP of +1,300.12% and a Zacks Rank #2.
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Career Education Corporation (PRDO): 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.