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Grand Canyon Education (LOPE)
:LOPE
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Grand Canyon Education (LOPE) AI Stock Analysis

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LOPE

Grand Canyon Education

(NASDAQ:LOPE)

Rating:78Outperform
Price Target:
$208.00
▲(22.22%Upside)
Grand Canyon Education's strong financial performance and positive earnings call outlook are the primary drivers of its overall score. While technical indicators suggest short-term bearish momentum, the company's robust growth, profitability, and strategic program expansions provide a solid foundation for future success. The moderate valuation and absence of a dividend yield slightly temper the overall attractiveness.
Positive Factors
Earnings
LOPE delivered a solid adjusted EPS beat to consensus and guidance.
Enrollment Trends
1Q25 new enrollment trends were better than expected with GCU Online up low teens and Hybrid up low mid-teens.
Stock Valuation
Stock is trading at a discount to its Ed Tech peer group, suggesting potential for price appreciation.
Negative Factors
Revenue Guidance
Initial 2025 revenue guidance is slightly below consensus expectations.

Grand Canyon Education (LOPE) vs. SPDR S&P 500 ETF (SPY)

Grand Canyon Education Business Overview & Revenue Model

Company DescriptionGrand Canyon Education, Inc. (LOPE) is an educational services company primarily focused on providing academic and operational support services to institutions of higher education. The company operates in the education services sector, offering a wide range of services that include curriculum development, infrastructure management, marketing, and recruitment. Its core service is to support universities and colleges in enhancing their educational offerings and operational efficiency, allowing them to focus on delivering quality education to their students.
How the Company Makes MoneyGrand Canyon Education generates revenue by providing comprehensive educational services to partner institutions. The company's primary revenue stream comes from offering a bundle of support services, such as curriculum development, faculty recruitment, student enrollment, and retention strategies. It also manages online program platforms and provides technology solutions that facilitate online learning and campus management. Significant partnerships with universities enable Grand Canyon Education to expand its reach and enhance its service offerings, contributing significantly to its earnings.

Grand Canyon Education Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: -8.23%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong enrollment growth, strategic expansion of programs, and increased revenue and net income. However, challenges such as a slight decline in traditional campus enrollment, decreased revenue per student, and higher benefit and legal costs were noted.
Q1-2025 Updates
Positive Updates
Strong Online Enrollment Growth
Online enrollment grew by 7.9% in Q1 2025, exceeding long-term objectives.
Hybrid Enrollment Success
Hybrid enrollment increased by 16.5% year-over-year, excluding closed sites and teach-outs.
Improved Retention Rates
Retention of students increased in Q1 2025, attributed to program relevancy and alignment with career aspirations.
Service Revenue Increase
Service revenue increased to $289.3 million, up 5.3% from Q1 2024.
Net Income Growth
Net income increased by 5.3% to $71.6 million in Q1 2025 compared to the previous year.
Strategic Program Expansion
48 new programs, emphases, and certificates rolled out since January 1, 2023, directly tied to labor market opportunities.
Workforce Development Initiatives
Successful pre-apprenticeship and manufacturing pathways, with significant student completions.
Negative Updates
Traditional Campus Enrollment Decline
New and total traditional campus enrollments were down slightly year-over-year in Fall 2024.
Decreased Revenue Per Student
Revenue per student decreased year-over-year, partly due to leap year impact and contract modifications.
Higher Benefit Costs
Significantly higher-than-expected benefit costs due to an increase in high-cost claims.
Increased Legal Expenses
Anticipated increase in legal fees in 2025 due to ongoing lawsuits.
Company Guidance
During the Grand Canyon Education (GCE) Q1 2025 earnings call, the company provided several key metrics and guidance for the year. GCE reported a 7.9% growth in online enrollments and a 16.5% increase in hybrid enrollments, excluding closed sites. The company highlighted the addition of 48 new programs since 2023, contributing to the strong enrollment figures. GCE's service revenue increased by 5.3% to $289.3 million compared to Q1 2024, driven by a 5.8% rise in partner enrollments. Operating income was $88 million with a margin of 30.4%. Net income rose by 5.3% to $71.6 million, and GAAP diluted income per share was $2.52, with non-GAAP adjusted diluted income per share at $2.57, exceeding consensus estimates by $0.05. The company also repurchased 395,426 shares for $68.4 million in Q1. Looking forward, GCE expects new enrollments to grow in the mid-to-high single digits for the rest of 2025, with hybrid enrollments anticipated to increase in the low-to-mid teens. CapEx is projected to remain between $30 million and $40 million for the year. The effective tax rate is expected to be 23.7% for the full year, with increased state income taxes anticipated to continue.

Grand Canyon Education Financial Statement Overview

Summary
Grand Canyon Education presents a well-rounded financial performance with robust growth in revenue, strong profitability, solid balance sheet strength, and healthy cash flow generation. The company is well-positioned for continued success with conservative leverage, efficient operations, and strong cash flow, providing a solid foundation for future growth and stability.
Income Statement
90
Very Positive
Grand Canyon Education shows a solid performance with a consistent increase in revenue and profitability. The TTM (Trailing-Twelve-Months) gross profit margin is robust at 63.51%, indicating efficient cost management. The net profit margin is healthy at 21.94%, and the EBIT margin stands at 26.63%, showcasing strong operational efficiency. Revenue growth rate from 2023 to TTM is 9.06%, reflecting positive growth momentum. Overall, the company displays strong profitability and growth potential.
Balance Sheet
85
Very Positive
The balance sheet of Grand Canyon Education is strong with a low debt-to-equity ratio of 0.13, indicating a conservative leverage position. The return on equity (ROE) is impressive at 29.44%, highlighting efficient use of equity capital. The equity ratio is substantial at 75.68%, reflecting financial stability and a strong equity base. This solid balance sheet provides a cushion against potential economic fluctuations.
Cash Flow
88
Very Positive
Grand Canyon Education demonstrates strong cash flow management. The free cash flow growth rate from 2023 to TTM is 18.69%, indicating healthy cash generation. The operating cash flow to net income ratio is 1.19, and the free cash flow to net income ratio is 1.02, both suggesting efficient conversion of income into cash. These metrics reflect a strong liquidity position and the ability to support future investments or return capital to shareholders.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.03B960.90M911.31M896.56M844.10M
Gross Profit544.43M503.71M487.50M515.31M493.55M
EBITDA327.87M291.68M271.30M364.75M307.09M
Net Income226.23M204.99M184.68M260.34M257.20M
Balance Sheet
Total Assets1.02B930.46M832.75M1.22B1.84B
Cash, Cash Equivalents and Short-Term Investments324.62M244.51M181.70M600.94M256.61M
Total Debt108.52M99.28M77.44M61.18M171.78M
Total Liabilities234.57M212.45M195.13M177.70M270.25M
Stockholders Equity783.85M718.01M637.62M1.05B1.57B
Cash Flow
Free Cash Flow252.71M198.23M185.19M283.73M278.88M
Operating Cash Flow289.96M243.66M220.82M313.12M308.82M
Investing Cash Flow61.37M-80.47M-97.14M950.98M-19.35M
Financing Cash Flow-173.18M-137.12M-604.21M-908.93M-166.28M

Grand Canyon Education Technical Analysis

Technical Analysis Sentiment
Negative
Last Price170.19
Price Trends
50DMA
185.89
Negative
100DMA
180.75
Negative
200DMA
171.32
Negative
Market Momentum
MACD
-4.81
Positive
RSI
29.85
Positive
STOCH
29.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOPE, the sentiment is Negative. The current price of 170.19 is below the 20-day moving average (MA) of 176.76, below the 50-day MA of 185.89, and below the 200-day MA of 171.32, indicating a bearish trend. The MACD of -4.81 indicates Positive momentum. The RSI at 29.85 is Positive, neither overbought nor oversold. The STOCH value of 29.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LOPE.

Grand Canyon Education Risk Analysis

Grand Canyon Education disclosed 38 risk factors in its most recent earnings report. Grand Canyon Education reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Grand Canyon Education Peers Comparison

Overall Rating
UnderperformOutperform
Sector (53)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$4.83B21.3829.85%6.31%11.24%
77
Outperform
$5.69B20.4123.76%14.90%60.56%
76
Outperform
$4.12B19.0116.62%13.10%127.72%
69
Neutral
$1.88B16.726.86%3.09%5.72%11.02%
69
Neutral
$3.94B6.3914.87%0.79%5.91%137.49%
68
Neutral
$3.42B12.2631.14%1.26%140.30%
53
Neutral
C$4.45B4.20-20.57%3.55%8.21%2.02%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
LOPE
Grand Canyon Education
168.69
14.89
9.68%
ATGE
Adtalem Global Education
114.30
35.49
45.03%
LRN
Stride
129.21
55.85
76.13%
STRA
Strategic Education
77.63
-39.65
-33.81%
GHC
Graham Holdings
904.31
92.18
11.35%
LAUR
Laureate Education
23.01
8.53
58.91%

Grand Canyon Education Corporate Events

Shareholder Meetings
Grand Canyon Education Holds 2025 Annual Stockholders Meeting
Neutral
Jun 12, 2025

On June 10, 2025, Grand Canyon Education, Inc. held its 2025 Annual Meeting of Stockholders, where 90.7% of the outstanding shares voted. During the meeting, stockholders elected directors, approved executive compensation, and ratified KPMG LLP as the independent auditor for the fiscal year ending December 31, 2025. These decisions are likely to impact the company’s governance and financial oversight, potentially influencing its strategic direction and stakeholder confidence.

The most recent analyst rating on (LOPE) stock is a Buy with a $170.00 price target. To see the full list of analyst forecasts on Grand Canyon Education stock, see the LOPE Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025