Career Education Corporation (NASDAQ: CECO) and K12 (NYSE:LRN) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.
Insider and Institutional Ownership
75.4% of Career Education Corporation shares are owned by institutional investors. Comparatively, 79.5% of K12 shares are owned by institutional investors. 4.9% of Career Education Corporation shares are owned by company insiders. Comparatively, 18.3% of K12 shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This table compares Career Education Corporation and K12’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Career Education Corporation||-3.82%||3.73%||2.35%|
Volatility and Risk
Career Education Corporation has a beta of 2.71, indicating that its stock price is 171% more volatile than the S&P 500. Comparatively, K12 has a beta of -0.23, indicating that its stock price is 123% less volatile than the S&P 500.
Earnings and Valuation
This table compares Career Education Corporation and K12’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Career Education Corporation||$631.21 million||1.13||$42.44 million||($0.36)||-28.58|
|K12||$888.52 million||0.78||$35.91 million||N/A||N/A|
Career Education Corporation has higher revenue, but lower earnings than K12.
This is a summary of current ratings and target prices for Career Education Corporation and K12, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Career Education Corporation||0||1||1||0||2.50|
Career Education Corporation currently has a consensus target price of $13.00, suggesting a potential upside of 26.34%. K12 has a consensus target price of $18.50, suggesting a potential upside of 8.82%. Given Career Education Corporation’s higher probable upside, research analysts plainly believe Career Education Corporation is more favorable than K12.
K12 beats Career Education Corporation on 7 of the 12 factors compared between the two stocks.
About Career Education Corporation
Career Education Corporation, through its colleges, institutions and universities, offers education to students in a range of career-oriented disciplines through online, on-ground and hybrid learning programs. The Company’s American InterContinental University (AIU) and Colorado Technical University (CTU) provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. The Company operates through four segments: CTU, AIU, Culinary Arts and Transitional Group. Its University group consists of AIU and CTU, which serve students online with career-focused degree programs. Its Career Colleges Group consists of Culinary Arts and Transitional Group segments. The Culinary Arts segment includes Le Cordon Bleu institutions in North America (LCB), which offer hands-on educational programs in the career-oriented disciplines of culinary arts and patisserie and baking in the commercial-grade kitchens of Le Cordon Bleu.
K12 Inc. (K12) is a technology-based education company. The Company offers curriculum, software systems and educational services designed to facilitate individualized learning for students in kindergarten through 12th grade (K-12). It provides a continuum of technology-based educational products and solutions to public school districts, public schools, virtual charter schools, private schools and families. The Company offers a set of products and services primarily to three lines of business, which include Managed Public School Programs, which consists of virtual and blended schools; Institutional business, which includes educational products and services sold to school districts, public schools and other educational institutions, and Private Pay Schools and Other, which includes private schools, including international, for which it charges student tuition and direct consumer sales. It sells individual online courses and supplemental educational products directly to families.
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