Capella Education Co. (CPLA) Lowered to “Hold” at Zacks Investment Research

Zacks Investment Research downgraded shares of Capella Education Co. (NASDAQ:CPLA) from a buy rating to a hold rating in a research note released on Wednesday morning.

According to Zacks, “Capella Education reported impressive results in the first two quarters of 2016 with revenues, enrollment levels and earnings per share showing significant improvement. Total enrollment growth in the first two quarters of the year was driven by higher enrollment in FlexPath programs, improved early-cohort persistence and higher percentage of returning learners. Moreover, the company’s focus non-degree programs are encouraging and should top line in the long term. Capella expects the Hackbright Academy and DevMountain acquiistions to contribute to revenues in near term. However, revenues were hurt in the past two quarters by an unfavorable degree mix shift and change in accounting for revenue recognition. Moreover, an unfavorable shift in the student mix from PhD to the masters’ degree program is hurting revenue per student.”

Other equities analysts have also recently issued reports about the company. Credit Suisse Group AG reissued a buy rating on shares of Capella Education in a report on Tuesday. Barrington Research boosted their price target on Capella Education from $60.00 to $66.00 and gave the stock an outperform rating in a report on Wednesday, July 27th. Two equities research analysts have rated the stock with a hold rating and four have given a buy rating to the company’s stock. The company presently has a consensus rating of Buy and a consensus target price of $59.80.

Capella Education (NASDAQ:CPLA) traded up 0.68% during trading on Wednesday, hitting $59.04. The stock had a trading volume of 37,433 shares. The stock’s 50-day moving average is $59.11 and its 200 day moving average is $55.12. The firm has a market cap of $682.68 million, a price-to-earnings ratio of 18.31 and a beta of 1.05. Capella Education has a one year low of $39.06 and a one year high of $63.01.

Capella Education (NASDAQ:CPLA) last released its quarterly earnings results on Tuesday, July 26th. The company reported $0.82 earnings per share for the quarter, missing the Zacks’ consensus estimate of $0.87 by $0.05. Capella Education had a return on equity of 20.80% and a net margin of 9.12%. The company earned $106.70 million during the quarter, compared to analyst estimates of $105.93 million. During the same period last year, the firm earned $0.83 earnings per share. The business’s revenue was up 2.0% compared to the same quarter last year. Equities analysts anticipate that Capella Education will post $3.49 earnings per share for the current year.

The firm also recently announced a quarterly dividend, which will be paid on Friday, October 14th. Investors of record on Friday, August 26th will be paid a $0.39 dividend. The ex-dividend date is Wednesday, August 24th. This represents a $1.56 annualized dividend and a yield of 2.66%. Capella Education’s payout ratio is currently 48.30%.

In other Capella Education news, CFO Steven L. Polacek sold 2,894 shares of the business’s stock in a transaction dated Monday, August 22nd. The stock was sold at an average price of $62.00, for a total transaction of $179,428.00. Following the completion of the sale, the chief financial officer now owns 43,355 shares of the company’s stock, valued at $2,688,010. The transaction was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, CEO J Kevin Gilligan sold 16,892 shares of the business’s stock in a transaction dated Friday, August 19th. The shares were sold at an average price of $59.23, for a total value of $1,000,513.16. Following the sale, the chief executive officer now directly owns 69,705 shares of the company’s stock, valued at approximately $4,128,627.15. The disclosure for this sale can be found here. 6.50% of the stock is owned by corporate insiders.

Large investors have recently bought and sold shares of the stock. Makaira Partners LLC purchased a new stake in Capella Education during the first quarter worth about $36,666,000. Norges Bank purchased a new stake in Capella Education during the fourth quarter worth about $7,941,000. Royce & Associates LP increased its stake in Capella Education by 9.1% in the second quarter. Royce & Associates LP now owns 1,022,471 shares of the company’s stock worth $53,823,000 after buying an additional 85,500 shares during the period. 1832 Asset Management L.P. increased its stake in Capella Education by 124.2% in the second quarter. 1832 Asset Management L.P. now owns 137,688 shares of the company’s stock worth $12,179,000 after buying an additional 76,269 shares during the period. Finally, Numeric Investors LLC purchased a new stake in Capella Education during the second quarter worth about $2,885,000. 90.37% of the stock is owned by hedge funds and other institutional investors.

About Capella Education

Capella Education Company is an online postsecondary education services company. The Company’s academic programs are delivered through its subsidiary, Capella University (the University), which is an online academic institution offering online postsecondary education services primarily to working adults.

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