Markets

Why DeVry Education Group Inc. (DV) Stock Is Falling Today

DV Chart

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What:DeVry Education Group stock is getting hammered on Feb. 6, down 17% as of 2:30 p.m.

So what: The company's Q2 earnings -- released after the market's close on Feb. -- came in 4% short of analyst estimates, and were down 12% from last year. Net sales in the quarter declined more than 1% from the year-ago period. This comes on the back of a relatively strong first quarter that had lifted the stock as much as 40% over the past year:

DV data by YCharts

The market also looks to be responding to statements from the earnings call that operating costs in the third quarter are expected to rise. CFO Timothy Wiggins said on the call:

We anticipate that operating costs will increase about 4.5% sequentially. About one-third of the increase will be driven by campus expansion at Chamberlain, about one-third is related to recent acquisitions in Brazil and about one-third driven primarily by an increase in DeVry University advertising expense, all to support future revenue growth.

Now what: The additional operating expense looks necessary in order to grow revenue, and the short-term hit to profits looks intended to pay off in the long-term by increasing enrollment, which will actually reduce operating expense as a percentage of revenue over time.

Will it pay off? Only time will answer that question. Attendance at DeVry University has recently been on the decline, while DeVry Brasil and Carrington are both growing attendance measurably.

1 great stock to buy for 2015 and beyond

2015 is shaping up to be another great year for stocks. But if you want to make sure that 2015 is your best investing year ever, you need to know where to start. That's why The Motley Fool's chief investment officer just published a brand-new research report that reveals his top stock for the year ahead. To get the full story on this year's stock -- completely free -- simply click here .

The article Why DeVry Education Group Inc. ( DV ) Stock Is Falling Today originally appeared on Fool.com.

Jason Hall has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

Copyright © 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy .

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.

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More