Education
About Us
Working with TipRanks
Follow Us
Grand Canyon Education (LOPE)
NASDAQ:LOPE
Top Page
Grand Canyon Education
(NASDAQ:LOPE)
Rating:82Outperform
Price Target:
$226.00
▲( 16.85% Upside)
Positive Factors
Earnings Performance
Revenue in the first quarter increased 5.3% to $289.3 million, above the FactSet consensus and management’s guidance.
Financial Guidance
Full-year 2025 guidance raised, with revenue, GAAP operating margins, and EPS now expected above prior guidance.
Investment Rating
The stock is trading at a discount to its Ed Tech peer group, with an OUTPERFORM investment rating and a raised 12-month price target.
Negative Factors
Initial Revenue Guidance
Initial 2025 revenue guidance is slightly below consensus expectations.
Grand Canyon Education (LOPE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.59B
Dividend YieldN/A
Average Volume (3M)221.49K
Price to Earnings (P/E)24.4
Beta (1Y)0.88
Revenue Growth6.31%
EPS Growth11.24%
CountryUS
Employees4,092
SectorConsumer Defensive
Sector Strength72
IndustryEducation & Training Services
Share Statistics
EPS (TTM)2.57
Shares Outstanding28,374,510
10 Day Avg. Volume202,511
30 Day Avg. Volume221,493
Financial Highlights & Ratios
PEG Ratio14.65
Price to Book (P/B)7.17
Price to Sales (P/S)0.00
P/FCF Ratio22.03
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue1.32
Enterprise Value/Gross Profit8.14
Enterprise Value/Ebitda4.33
Forecast
1Y Price Target
$217.33Price Target Upside12.37% 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 Financial Statement Overview
Summary
Grand Canyon Education presents a solid financial position with strengths in revenue growth, operational efficiency, and cash flow management. While profitability and leverage are well-managed, the unexplained zero revenue in 2024 and the increasing debt levels are areas to monitor. Overall, the company is financially stable with opportunities for continued growth in the education industry.Income Statement
Grand Canyon Education has demonstrated consistent revenue growth over the years, with a notable increase in revenue from 2019 to 2023. The company maintains strong EBIT and EBITDA margins, indicating operational efficiency. However, the net profit margin experienced a slight decline in recent years, which could be a point of concern. The inability to calculate the gross profit margin for 2024 due to zero revenue is an anomaly that needs clarification.72
Positive
Balance Sheet
The company's balance sheet reflects stability with a healthy equity ratio and a manageable debt-to-equity ratio. The return on equity is strong, showing effective use of shareholders' equity. The consistent increase in stockholders' equity over the years is a positive indicator of financial health. However, the increase in total debt from 2020 to 2024 warrants attention.78
Positive
Cash Flow
Grand Canyon Education exhibits robust cash flow from operations, with free cash flow growing steadily over the years. The operating cash flow to net income ratio indicates strong cash generation relative to net income. The free cash flow to net income ratio is also favorable, reflecting efficient cash management. The fluctuations in investing cash flow suggest strategic investments that could benefit future growth.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.03B | 960.90M | 911.31M | 896.56M | 844.10M | Gross Profit |
| 544.43M | 503.71M | 487.50M | 515.31M | 493.55M | EBIT |
| 275.40M | 249.26M | 237.50M | 282.19M | 277.44M | EBITDA |
| 327.87M | 291.68M | 271.30M | 364.75M | 307.09M | Net Income Common Stockholders |
| 226.23M | 204.99M | 184.68M | 260.34M | 257.20M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 324.62M | 244.51M | 181.70M | 600.94M | 256.61M | Total Assets |
| 1.02B | 930.46M | 832.75M | 1.22B | 1.84B | Total Debt |
| 108.52M | 99.28M | 77.44M | 61.18M | 171.78M | Net Debt |
| -216.10M | -47.19M | -42.97M | -539.76M | -73.99M | Total Liabilities |
| 234.57M | 212.45M | 195.13M | 177.70M | 270.25M | Stockholders Equity |
| 783.85M | 718.01M | 637.62M | 1.05B | 1.57B |
| Cash Flow | Free Cash Flow | |||
| 252.71M | 198.23M | 185.19M | 283.73M | 278.88M | Operating Cash Flow |
| 289.96M | 243.66M | 220.82M | 313.12M | 308.82M | Investing Cash Flow |
| 61.37M | -80.47M | -97.14M | 950.98M | -19.35M | Financing Cash Flow |
| -173.18M | -137.12M | -604.21M | -908.93M | -166.28M |
Grand Canyon Education Technical Analysis
Positive
193.41
Price Trends
179.71
Positive
176.69
Positive
162.72
Positive
Market Momentum
4.89
Positive
61.67
Neutral
27.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LOPE, the sentiment is Positive. The current price of 193.41 is above the 20-day moving average (MA) of 190.34, above the 50-day MA of 179.71, and above the 200-day MA of 162.72, indicating a bullish trend. The MACD of 4.89 indicates Positive momentum. The RSI at 61.67 is Neutral, neither overbought nor oversold. The STOCH value of 27.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 2 New Risks
1.
Artificial intelligence is an emerging area of technology that has and may further impact various aspects of our business operations and that of our university partners, and we may not be successful in our artificial intelligence initiatives, which could adversely affect our business, financial condition and/or operating results. Q4, 2024
2.
Macroeconomic conditions and aversion to debt could adversely affect the ability of our university partner institutions to recruit new students and adversely affect our business. Q4, 2024
Grand Canyon Education Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $5.59B | 24.37 | 29.85% | ― | 6.31% | 11.24% | |
81 Outperform | $6.85B | 24.34 | 23.76% | ― | 14.90% | 60.56% | |
80 Outperform | $4.62B | 21.32 | 16.62% | ― | 13.10% | 127.72% | |
74 Outperform | $3.24B | 11.60 | 31.14% | ― | 1.26% | 140.30% | |
73 Outperform | $2.12B | 18.75 | 6.86% | 2.74% | 5.72% | 11.02% | |
71 Outperform | $4.02B | 6.46 | 14.87% | 0.75% | 5.91% | 137.49% | |
64 Neutral | $8.78B | 14.55 | 4.78% | 173.91% | 3.39% | 2.17% |
* Consumer Defensive Sector Average
Performance Comparison
LOPE
Grand Canyon Education
193.41
47.95
32.96%
ATGE
Adtalem Global Education
128.50
62.96
96.06%
LRN
Stride
153.00
82.09
115.77%
STRA
Strategic Education
87.48
-24.31
-21.75%
GHC
Graham Holdings
921.17
179.23
24.16%
LAUR
Laureate Education
21.84
5.82
36.33%
Grand Canyon Education Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 4.29%|
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.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.