Strayer Education, Inc. (
STRA) has seen an up tick in its enrollment and revenue due to the weak economy, as many professionals head back to school to beef up their skills. The company's stock is trading with a very high P/E, but regardless, its share price continues to advance.
Strayer Education, Inc., through its subsidiary, Strayer University, operates as an educational institution specializing in both classroom and online learning resources.
When the economy slows down and wages stagnate, it provides an extra incentive for many individuals to pursuit additional training to ratchet up their credentials. This dynamic has been in play for a number of for profit academic institutions, including Strayer Education.
Second-Quarter Results
The company's second-quarter results, reported on July 24, were excellent. Sales were up 24% from last year to $98 million. Profit climbed to $21.3 million, up from $17.4 million last year. This produced earnings of $1.50 per share, ahead of analyst estimates by 3 cents.
Strayer has surprised and beaten analyst estimates over the last 4 quarters by an average of 4 cents, or 3.26%, a very impressive accomplishment in this challenging environment.
Impressive Enrollment Growth
Strayer reported its spring enrollment was up 28% compared to last year, while summer enrollment jumped 17%. Strayer has been aggressively expanding its presence in its primary eastern U.S. markets and is currently on course to open nine campuses in 2008 to bring its total to 60.
Analyst Estimates
With Strayer coming into focus as an attractive investment during a tough stretch in the domestic economy, analyst have been quick to revise their earnings projections. The current-year estimate has been steadily advancing, climbing to $5.51 per share from $5.44 per share 90 days ago. The next-year estimate is very bullish, with analysts projecting earnings of $6.66 per share.
The Chart
Shares of STRA have been in a very smooth up trend for most of the year, recently setting a new 52-week and all-time high above $227. At these levels, this is not a cheap stock, trading with a forward P/E multiple above 40X. Take a look at the chart below.
"STR1" Free Stock Analysis: Buy? Sell? Hold?
