PHOENIX, April 7, 2025 /PRNewswire/ -- Grand Canyon Education, Inc. (Nasdaq:LOPE) announced today that it will report its 2025 first quarter results after market close on Tuesday, May 6, 2025. The Company will host a conference call to discuss the results in more detail at 1:30 P.M. (4:30 P.M. ET) the same day.Live Conference Dial-In:Those interested in participating in the question-and-answer session should follow the conference dial-in instructions below.Participants may register for the call here to rece ...

Group 1 - The company Grand Canyon Education, Inc. (NASDAQ: LOPE) was identified as a bullish investment opportunity in December 2023 due to a trend of increasing enrollment numbers [1] - The growing commitment from students indicates a positive outlook for the company's future performance [1] Group 2 - The investment strategy focuses on acquiring undervalued profitable stocks with strong balance sheets and minimal debt [1] - The approach includes writing calls against positions to generate additional income when opportunities arise [1] - Risk management is emphasized through position sizing and the use of trailing stop losses over time [1]

Financial Data and Key Metrics Changes - Grand Canyon Education reported service revenue of $292.6 million for Q4 2024, an increase of $14.3 million or 5.1% compared to $278.3 million in Q4 2023 [26] - Operating income for Q4 2024 was $100 million with an operating margin of 34.2%, while net income increased 1.4% to $81.9 million compared to $80.7 million in Q4 2023 [27][28] - GAAP diluted income per share for Q4 2024 was $2.84, while adjusted non-GAAP diluted income per share was $2.95, slightly above consensus estimates [29][32] Business Line Data and Key Metrics Changes - Online enrollment growth was 7.1% in Q4 2024, with hybrid growth excluding closed sites at 14.9% [5][14] - The hybrid campus saw a year-over-year enrollment increase of 9.8% in Q4 2024, with expectations for low-to-mid teens growth in 2025 [14] - Traditional campus enrollments were down slightly year-over-year, but there are positive trends for new student registrations for fall 2025 [11][13] Market Data and Key Metrics Changes - GCE's service revenue increase was primarily driven by a 5% increase in GCU enrollments and a 9.8% increase in university partner enrollments at off-campus sites [27] - The company anticipates total online enrollments to grow year-over-year in the mid-to-high single digits throughout 2025 [42] Company Strategy and Development Direction - Grand Canyon Education aims to address workforce challenges by expanding relevant programs and creative delivery models [6][7] - The company plans to grow its traditional campus to 50,000 students and has set a goal of 80 locations for its hybrid programs [12][20] - GCE is focused on producing graduates in high-demand fields such as nursing and education, which aligns with national workforce needs [24][86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in meeting enrollment growth goals despite current challenges, citing strong retention rates and relevant program offerings [10][13] - The company anticipates a slight decline in margins in the first half of 2025 due to increased investments but expects margins to expand in the second half [49] - Management highlighted the positive regulatory environment and the potential for increased support from the administration for their educational model [87][96] Other Important Information - The effective tax rate for Q4 2024 was 21.2%, an increase from 19.9% in Q4 2023, primarily due to higher state income taxes [35][50] - The company repurchased 416,497 shares at a cost of approximately $64.8 million in Q4 2024, with an additional 226,258 shares repurchased since then [36][37] Q&A Session Summary Question: Can you discuss demand and conversion initiatives for fall 2025 ground campus intake? - Management noted adjustments to the Discover GCU process have improved conversion rates, leading to significant early registrations for fall 2025 [54][57] Question: What are the academic outcomes for ABSN students? - The reported outcomes are for all ABSN students, with high success rates for those entering the program [60][64] Question: What is the status of the GCU contract? - The GCU contract continues without expiration in July, with discussions about early extension due to positive outcomes [72][74] Question: How many hybrid locations are currently open? - There are currently 45 hybrid sites open, with plans to open six to eight more per year [75] Question: Any impact from changes in the Department of Education? - Management indicated no significant impact, emphasizing the focus on outcomes and the positive reception of their educational model [84][91]

Core Insights - Grand Canyon Education's revenue and earnings growth modestly outpaced analysts' expectations, with adjusted EPS of $2.95 and revenue of $292.6 million [2][3] Financial Performance - Adjusted EPS for Q4 2024 was $2.95, slightly above the expected $2.94, representing a 6.5% increase from $2.77 in Q4 2023 [3] - Revenue reached $292.6 million, exceeding the forecast of $289 million, and showing a 5.1% increase from $278.3 million in the previous year [3] - Net income for the quarter was $81.9 million, up from $80.7 million year-over-year, reflecting a 1.4% increase [3] - Operating margin decreased to 34.2% from 35.1% in the prior year, a decline of 90 basis points [3] Business Overview - Grand Canyon Education provides educational support services, primarily focusing on online and campus-based programs, with a significant partnership with Grand Canyon University [4] - The company is emphasizing technological investments and scalability to enhance service offerings and maintain a competitive edge [4][5] Enrollment and Revenue Drivers - The fourth quarter's revenue growth was driven by increased enrollments and higher revenue per student, with online enrollments growing by 7.1% [6][7] - Traditional enrollments at Grand Canyon University saw a slight decline, with on-campus students decreasing from 25,209 to 24,552 [7] Future Outlook - For Q1 2025, the company projects service revenues between $286.5 million and $287.5 million, with an operating margin expectation of 30% to 30.2% [8] - For the full year 2025, service revenue is forecasted to be between $1.075 billion and $1.097 billion, indicating optimism about continued demand growth [8]

Financial Performance - The company recorded $1,033 million in service revenue for the year ended December 31, 2024, reflecting a significant contribution from university partners' tuition and fee revenue [354]. - Total service revenue for 2024 reached $1,033,002, an increase of 7.5% from $960,899 in 2023 [361]. - Operating income improved to $275,399 in 2024, up 10.5% from $249,256 in 2023 [361]. - Net income for 2024 was $226,234, representing a 10.4% increase compared to $204,985 in 2023 [361]. - Cash and cash equivalents increased significantly to $324,623 in 2024, up 121.5% from $146,475 in 2023 [370]. - Total assets grew to $1,018,425 in 2024, a rise of 9.5% from $930,463 in 2023 [359]. - Total liabilities increased to $234,572 in 2024, up 10.4% from $212,449 in 2023 [359]. - Basic earnings per share rose to $7.77 in 2024, compared to $6.83 in 2023, marking a 13.8% increase [361]. - Cash flows from operating activities improved to $289,958 in 2024, an increase of 19.0% from $243,662 in 2023 [370]. - Retained earnings increased to $2,470,946 in 2024, up from $2,244,712 in 2023, reflecting a growth of 10.1% [359]. Taxation - The effective income tax rate was reduced to 22.3% for the year ended December 31, 2024, due to contributions to private Arizona school tuition organizations [56]. - The total income tax expense for the year ended December 31, 2024, was $65,081, an increase from $54,690 in 2023, representing a rise of approximately 19% [454]. - The effective income tax rate for 2024 was 22.3%, compared to 21.1% in 2023, indicating an increase of 1.2 percentage points [455]. - The Company has no non-income tax related matters where exposure is considered probable as of December 31, 2024, and 2023 [444]. - The Company had accrued $0 in interest and $0 in penalties related to unrecognized tax benefits for both 2024 and 2023 [457]. - Unrecognized tax benefits increased to $14,626 million in 2024 from $13,631 million in 2023, indicating a rise in uncertain tax positions [457]. Investments and Assets - The company has no derivative financial instruments or investments as of December 31, 2024, indicating a conservative approach to market risk management [344]. - The company has not made any investments as of December 31, 2024, which may limit potential future income from investments [345]. - The company had investments of $0 as of December 31, 2024, down from $98,031 million in 2023, after selling all investments in Q3 2024 [426]. - As of December 31, 2024, the company reported deferred content assets of $658 million, net of amortization, compared to $746 million in 2023 [385]. - The company evaluates the recoverability of long-lived assets for impairment whenever events indicate that the carrying amount may not be recoverable [386]. - Total property and equipment net value increased to $176,823 million in 2024 from $169,699 million in 2023, with depreciation expense totaling $27,760 million for 2024 [428]. Student Retention and Revenue Sources - The management emphasizes the importance of retaining active students to graduation, which is critical for sustaining revenue growth [15]. - The company retains 60% of Grand Canyon University's tuition and fee revenue as part of a long-term master services agreement [382]. - The company generated 88.9% of total service revenue from its most significant university partner for the year ended December 31, 2024 [417]. - The company anticipates fluctuations in revenues due to seasonality, which may impact overall financial performance [15]. - The company has faced challenges related to capacity constraints and system disruptions that could affect student retention [11]. Legal Matters - The trial for the False Claims Act matter is scheduled for October 2025, following unsuccessful attempts to reach a settlement [436]. - The Company intends to defend itself vigorously in various legal proceedings, including those related to marketing practices and consumer protection statutes [440]. - The Company has not accrued any liability associated with ongoing legal proceedings, as it cannot estimate a range of loss based on available information [443]. Share Repurchase and Equity - The Company repurchased common shares costing $173,175 in 2024, compared to $137,124 in 2023 [370]. - The Board of Directors approved a $200,000 increase under its existing stock repurchase program, bringing the total authorization for share repurchases to $2,245,000 [448]. - The Company repurchased 1,142 shares of common stock at an aggregate cost of $165,405 during the year ended December 31, 2024, with $99,648 remaining available under the repurchase authorization as of December 31, 2024 [449]. - The Company reported basic weighted average shares outstanding of 29,104 for the year ended December 31, 2024, down from 29,991 in 2023, indicating a decrease of approximately 3% [446]. - Diluted weighted average shares outstanding for 2024 were 29,271, compared to 30,147 in 2023, reflecting a decrease of about 3% [446]. Compensation and Employee Benefits - Share-based compensation expense included in operating expenses for 2024 was $14,225 million, up from $13,204 million in 2023 [465]. - The Company plans to make a matching contribution of approximately $3,092 million to its 401(k) Plan for the year ended December 31, 2024 [466]. - The Company granted 117, 136, and 189 shares of common stock as restricted stock awards in fiscal years 2024, 2023, and 2022, respectively [460]. - Total unrecognized share-based compensation cost related to unvested restricted stock awards was approximately $30,345 million as of December 31, 2024 [462]. - The Company withheld 55, 56, and 52 shares of common stock in lieu of taxes at a cost of $7,446 million, $6,331 million, and $4,625 million during the years ended December 31, 2024, 2023, and 2022, respectively [460].

Revenue and Income - Service revenue for Q4 2024 was $292.6 million, a 5.1% increase from $278.3 million in Q4 2023, driven by a 5.0% increase in enrollments at Grand Canyon University to 123,149[4] - For the full year 2024, service revenue was $1,033.0 million, a 7.5% increase from $960.9 million in 2023, primarily due to increased enrollments at GCU[5] - Total revenue for the year ended December 31, 2024, reached $1,033,002,000, up 7.5% from $960,899,000 in 2023[23] - Operating income for Q4 2024 was $100.0 million, a 2.3% increase from $97.8 million in Q4 2023, with an operating margin of 34.2%[4] - Operating income for Q4 2024 was $100,027,000, compared to $97,799,000 in Q4 2023, reflecting a growth of 2.5%[23] - Net income for Q4 2024 was $81.9 million, a 1.4% increase from $80.7 million in Q4 2023, with diluted net income per share rising to $2.84 from $2.71[4] - Net income for the year ended December 31, 2024, was $226,234,000, an increase of 10.4% from $204,985,000 in 2023[28] - Basic earnings per share for Q4 2024 was $2.86, up from $2.73 in Q4 2023, representing a growth of 4.8%[23] - Non-GAAP diluted income per share for Q4 2024 was $2.95, up from $2.77 in Q4 2023, indicating a growth of 6.5%[35] Enrollment and Partner Performance - Partner enrollments totaled 127,155 at December 31, 2024, up from 121,250 at December 31, 2023, with off-campus classroom and laboratory site enrollments increasing by 9.8%[4] - The company reported net cash provided by operating activities of $289,958,000 for the year ended December 31, 2024, compared to $243,662,000 in 2023[28] Adjusted EBITDA - Adjusted EBITDA for the full year 2024 increased by 12.5% to $340.0 million compared to $302.3 million in 2023[5] - Adjusted EBITDA for Q4 2024 was $116,572,000, an increase from $110,932,000 in Q4 2023, representing a growth of 4.7%[34] - The company reported a total of $340,013,000 in Adjusted EBITDA for the year ended December 31, 2024, compared to $302,302,000 in 2023, marking a year-over-year increase of 12.5%[34] Cash and Assets - Cash and cash equivalents as of December 31, 2024, were $324,623,000, significantly higher than $146,475,000 at the end of 2023[26] - Total assets increased to $1,018,425,000 as of December 31, 2024, compared to $930,463,000 in 2023, marking an increase of 9.5%[26] Liabilities and Expenses - Total liabilities rose to $234,572,000 as of December 31, 2024, compared to $212,449,000 in 2023, an increase of 10.4%[26] - Capital expenditures for the year ended December 31, 2024, were $37,248,000, down from $44,537,000 in 2023[28] - Income tax expense for Q4 2024 was $22,073,000, compared to $20,054,000 in Q4 2023, reflecting an increase of 10.1%[34] - The company recognized $4,500,000 in contributions in lieu of state income taxes for the year ended December 31, 2024, up from $3,500,000 in 2023[34] - The total interest expense for the year ended December 31, 2024, was $4,000, compared to $33,000 in 2023, showing a significant decrease[34] Share Repurchase and Guidance - The company announced a $200.0 million increase in its share repurchase program, bringing the total authorization to $2,245.0 million[6] - For Q1 2025, the company expects adjusted diluted EPS to be between $2.50 and $2.52, including a $0.06 impact from non-cash amortization of intangible assets[8] - The full year 2025 diluted EPS guidance is between $8.43 and $8.82, with service revenue expected between $1,074.5 million and $1,097.0 million[12] Other Financial Metrics - The effective tax rate for the year ended December 31, 2024 was 22.3%, up from 21.1% in 2023, due to higher state income taxes[5] - The company incurred $1,133,000 in severance costs for the year ended December 31, 2024, which was not present in 2023[35] - The company reported a loss on fixed asset disposal of $102,000 for the year ended December 31, 2024, down from $741,000 in 2023[35] - The company’s core operating performance is measured by Adjusted EBITDA, which excludes unusual, non-routine, or non-recurring expenses[32]

Company Overview - Grand Canyon Education, Inc. (GCE) is a publicly traded education services company incorporated in 2008, providing services to 22 university partners [4] - The company has 30 years of proven expertise in delivering a full array of support services in the post-secondary education sector, including technological solutions and operational processes [4] Upcoming Financial Results - GCE will report its 2024 fourth quarter results after market close on February 19, 2025 [1] - A conference call to discuss the results will be held at 2:30 P.M. (4:30 P.M. ET) on the same day [1] Conference Call Details - Participants interested in the question-and-answer session can register to receive dial-in numbers and a unique PIN [2] - A live webcast of the earnings conference call will be available, with a replay accessible approximately two hours after the call [3]

Group 1 - The article expresses a bullish outlook on Grand Canyon Education, Inc. (NASDAQ: LOPE) due to a significant enrollment spike and above-average retention rates positively impacting earnings [1] - The company's shares have shown resilience and growth over the past year, driven by these favorable enrollment and retention metrics [1] Group 2 - The investment strategy discussed involves purchasing undervalued, profitable stocks with strong balance sheets and minimal debt, along with writing calls to generate additional income when opportunities arise [1]

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for successful short-term investing, highlighting the use of a specific screening strategy to identify stocks with strong fundamentals and positive price momentum [1][2]. Group 1: Stock Screening Strategy - The "Recent Price Strength" screen is designed to identify stocks with sufficient fundamental strength to maintain their upward trend, focusing on those trading in the upper portion of their 52-week high-low range, indicating bullishness [3]. - Grand Canyon Education (LOPE) is highlighted as a strong candidate for trend investing, having increased by 14.8% over the past 12 weeks, reflecting investor confidence [4]. - LOPE has also seen a price increase of 25% over the past four weeks, suggesting that the upward trend is still intact, and it is currently trading at 87.4% of its 52-week high-low range, indicating a potential breakout [5]. Group 2: Fundamental Strength - LOPE carries a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, which are critical for near-term price movements [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. - The Zacks Rank system has a proven track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988, underscoring the effectiveness of this ranking system [7]. Group 3: Additional Insights - Besides LOPE, there are other stocks that meet the criteria of the "Recent Price Strength" screen, suggesting further investment opportunities [8]. - The article encourages investors to utilize various Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [8].

Core Viewpoint - Grand Canyon Education (LOPE) has experienced significant stock performance, with a 24% increase over the past month and a 52-week high of $164.93, outperforming both the Zacks Consumer Discretionary sector and the Zacks Schools industry [1][2]. Financial Performance - The company has consistently exceeded earnings expectations, reporting an EPS of $1.48 against a consensus estimate of $1.46 in its latest earnings report [2]. - For the current fiscal year, Grand Canyon Education is projected to achieve earnings of $8.03 per share on revenues of $1.03 billion, reflecting a 14.06% increase in EPS and a 7.23% increase in revenues [3]. - The next fiscal year forecasts earnings of $8.81 per share on $1.11 billion in revenues, indicating year-over-year changes of 9.71% and 7.73%, respectively [3]. Valuation Metrics - The stock trades at a valuation of 20.4X current fiscal year EPS estimates, which is above the peer industry average of 19.1X [7]. - On a trailing cash flow basis, the stock trades at 20.1X compared to the peer group's average of 12.4X, with a PEG ratio of 1.36 [7]. - Grand Canyon Education holds a Value Score of B, a Growth Score of A, and a Momentum Score of B, resulting in a VGM Score of A [6]. Zacks Rank - The company has a Zacks Rank of 2 (Buy), supported by rising earnings estimates, making it a favorable choice for investors [8]. - The recommendation is to select stocks with a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, which applies to Grand Canyon Education [8]. Industry Comparison - In comparison to industry peers, Adtalem Global Education Inc. (ATGE) also shows strong performance with a Zacks Rank of 2 (Buy) and solid earnings expectations [9]. - The Schools industry is performing well, ranking in the top 12% of all industries, indicating positive market conditions for both LOPE and ATGE [11].