Zacks Investment Research Lowers Capella Education (CPLA) to Sell

Capella Education (NASDAQ:CPLA) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a report released on Tuesday.

According to Zacks, “Capella Education’s shares have underperformed the industry in the past year. Earnings estimates for 2018 and 2019 have also move down over the past 60 days. In spite of Capella Education’s investments in marketing, efforts to enhance relationship with employers and expansion of Flex Path offerings, total enrollments at Capella University continue to decline. Importantly, Strayer Education and Capella agreed to merge in a $1.9-billion deal on Oct 30. The deal is expected to close in the third quarter of 2018. The companies will combine in an all-stock deal of equal transactions, expected to close in the third quarter of 2018. Post completion, Capella’s shareholders will own approximately 48% of the newly-formed entity on a fully diluted basis. The merger is likely to ensure student success and positive employment outcomes.”

Several other brokerages have also issued reports on CPLA. BidaskClub upgraded shares of Capella Education from a “sell” rating to a “hold” rating in a research report on Wednesday, March 7th. ValuEngine upgraded shares of Capella Education from a “hold” rating to a “buy” rating in a research report on Thursday, June 21st. Piper Jaffray Companies upgraded shares of Capella Education from a “neutral” rating to an “overweight” rating in a research report on Monday, March 5th. BMO Capital Markets upped their target price on shares of Capella Education from $94.00 to $103.00 and gave the stock an “outperform” rating in a research report on Thursday, May 3rd. Finally, Barrington Research reiterated a “hold” rating on shares of Capella Education in a research report on Monday, March 5th. One analyst has rated the stock with a sell rating, two have given a hold rating and four have issued a buy rating to the stock. The company currently has a consensus rating of “Hold” and a consensus target price of $97.25.

Shares of Capella Education traded up $0.15, reaching $101.30, during mid-day trading on Tuesday, according to Marketbeat.com. 1,786 shares of the stock traded hands, compared to its average volume of 63,496. The firm has a market capitalization of $1.15 billion, a P/E ratio of 29.55, a price-to-earnings-growth ratio of 2.25 and a beta of 0.28. Capella Education has a 1 year low of $65.15 and a 1 year high of $101.35.

Capella Education (NASDAQ:CPLA) last announced its earnings results on Wednesday, May 2nd. The company reported $1.20 earnings per share (EPS) for the quarter, topping the consensus estimate of $1.17 by $0.03. Capella Education had a net margin of 5.92% and a return on equity of 19.78%. The company had revenue of $112.00 million during the quarter, compared to analyst estimates of $112.92 million. During the same period in the previous year, the business earned $0.94 earnings per share. The firm’s quarterly revenue was up .2% compared to the same quarter last year. research analysts forecast that Capella Education will post 4.39 earnings per share for the current year.

A number of institutional investors have recently bought and sold shares of CPLA. UBS Asset Management Americas Inc. bought a new stake in Capella Education in the fourth quarter worth $209,000. Stone Ridge Asset Management LLC bought a new stake in Capella Education in the fourth quarter worth $217,000. Xact Kapitalforvaltning AB bought a new stake in Capella Education in the first quarter worth $278,000. Virtu Financial LLC bought a new stake in Capella Education in the fourth quarter worth $309,000. Finally, Teacher Retirement System of Texas bought a new stake in Capella Education in the fourth quarter worth $309,000. 92.53% of the stock is owned by institutional investors and hedge funds.

About Capella Education

Capella Education Co engages in the provision of online postsecondary education services. It operates under the segments: Post Secondary and Job-Ready Skills. It also operates through its wholly-owned subsidiaries and majority-owned joint venture which includes Capella University, Sophia Learning LLC, Capella Learning Solutions, Hackbright Academy, Inc and DevMountain LLC.

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