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Grand Canyon Education (LOPE)
NASDAQ:LOPE
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Grand Canyon Education
(NASDAQ:LOPE)
Rating:78Outperform
Price Target:
$208.00
▲(13.39%Upside)
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.
Price Target
Reiterate OUTPERFORM investment rating and raising price target to $215, representing approximately 16% upside from current levels.
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)
Market Cap
$5.18B
Dividend YieldN/A
Average Volume (3M)203.83K
Price to Earnings (P/E)22.9
Beta (1Y)0.88
Revenue Growth6.31%
EPS Growth11.24%
CountryUS
Employees4,092
SectorConsumer Defensive
Sector Strength55
IndustryEducation & Training Services
Share Statistics
EPS (TTM)2.57
Shares Outstanding28,374,510
10 Day Avg. Volume253,334
30 Day Avg. Volume203,832
Financial Highlights & Ratios
PEG Ratio1.53
Price to Book (P/B)6.08
Price to Sales (P/S)0.00
P/FCF Ratio18.86
Enterprise Value/Market Cap0.83
Enterprise Value/Revenue1.05
Enterprise Value/Gross Profit6.45
Enterprise Value/Ebitda3.39
Forecast
1Y Price Target
$217.33Price Target Upside18.48% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Grand Canyon Education Business Overview & Revenue Model
Company DescriptionGrand Canyon Education, Inc. provides education services to colleges and universities in the United States. The company's technology services include learning management system, internal administration, infrastructure, and support services; academic services comprises program and curriculum, faculty and related training and development, class scheduling, and skills and simulation lab sites; and counseling services and support include admission, financial aid, and field experience and other counseling services. It also offers marketing and communication services, such as lead acquisition, digital communications strategy, brand identity, market research, media planning and strategy, video, and business intelligence and data science; and back-office services comprising finance and accounting, human resources, audit, and procurement services. The company, through its subsidiary, Orbis Education Services, LLC, supports healthcare education programs for 27 universities. Grand Canyon Education, Inc. was founded in 1949 and is based in Phoenix, Arizona.
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: -1.09%|
Next Earnings Date:Jul 31, 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
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.90
Very Positive
Balance Sheet
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.85
Very Positive
Cash Flow
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.88
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.05B | 1.03B | 960.90M | 911.31M | 896.56M | 844.10M |
| Gross Profit | 665.40M | 544.43M | 503.71M | 487.50M | 515.31M | 493.55M |
| EBITDA | 327.76M | 327.87M | 291.68M | 271.30M | 364.75M | 307.09M |
| Net Income | 229.84M | 226.23M | 204.99M | 184.68M | 260.34M | 257.20M |
Balance Sheet | ||||||
| Total Assets | 1.84B | 1.02B | 930.46M | 832.75M | 1.22B | 1.84B |
| Cash, Cash Equivalents and Short-Term Investments | 256.61M | 324.62M | 244.51M | 181.70M | 600.94M | 256.61M |
| Total Debt | 171.78M | 108.52M | 99.28M | 77.44M | 61.18M | 171.78M |
| Total Liabilities | 270.25M | 234.57M | 212.45M | 195.13M | 177.70M | 270.25M |
| Stockholders Equity | 1.57B | 783.85M | 718.01M | 637.62M | 1.05B | 1.57B |
Cash Flow | ||||||
| Free Cash Flow | 235.28M | 252.71M | 198.23M | 185.19M | 283.73M | 278.88M |
| Operating Cash Flow | 272.63M | 289.96M | 243.66M | 220.82M | 313.12M | 308.82M |
| Investing Cash Flow | -103.26M | 61.37M | -80.47M | -97.14M | 950.98M | -19.35M |
| Financing Cash Flow | -221.06M | -173.18M | -137.12M | -604.21M | -908.93M | -166.28M |
Grand Canyon Education Technical Analysis
Negative
183.43
Price Trends
188.87
Negative
182.01
Positive
169.00
Positive
Market Momentum
-0.79
Positive
40.30
Neutral
44.65
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 183.43 is below the 20-day moving average (MA) of 187.66, below the 50-day MA of 188.87, and above the 200-day MA of 169.00, indicating a neutral trend. The MACD of -0.79 indicates Positive momentum. The RSI at 40.30 is Neutral, neither overbought nor oversold. The STOCH value of 44.65 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $4.42B | 20.42 | 16.62% | ― | 13.10% | 127.72% | |
78 Outperform | $5.18B | 22.93 | 29.85% | ― | 6.31% | 11.24% | |
77 Outperform | $5.99B | 21.49 | 23.76% | ― | 14.90% | 60.56% | |
74 Outperform | $3.52B | 12.59 | 31.14% | ― | 1.26% | 140.30% | |
73 Outperform | $4.15B | 6.68 | 14.87% | 0.76% | 5.91% | 137.49% | |
69 Neutral | $2.03B | 18.01 | 6.86% | 2.85% | 5.72% | 11.02% | |
60 Neutral | HK$17.56B | 11.08 | 0.20% | 5.34% | 2.68% | -48.29% |
* Consumer Defensive Sector Average
Performance Comparison
LOPE
Grand Canyon Education
183.43
40.12
28.00%
ATGE
Adtalem Global Education
123.05
55.01
80.85%
LRN
Stride
138.60
70.42
103.29%
STRA
Strategic Education
83.45
-22.99
-21.60%
GHC
Graham Holdings
952.62
260.52
37.64%
LAUR
Laureate Education
23.64
9.10
62.59%
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.