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Bridgepoint Education Inc. Stock Downgraded (BPI)

NEW YORK (TheStreet) -- Bridgepoint Education (NYSE:BPI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, weak operating cash flow and disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 2.3%. Since the same quarter one year prior, revenues slightly increased by 9.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for BRIDGEPOINT EDUCATION INC is currently very high, coming in at 74.30%. Regardless of BPI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 13.20% trails the industry average.
  • Net operating cash flow has significantly decreased to $40.35 million or 50.46% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, BRIDGEPOINT EDUCATION INC has marginally lower results.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Diversified Consumer Services industry. The net income has significantly decreased by 38.7% when compared to the same quarter one year ago, falling from $53.92 million to $33.04 million.

Bridgepoint Education, Inc. provides postsecondary education services. It offers associate's, bachelor's, master's, and doctoral programs in the disciplines of business, education, psychology, social sciences, and health sciences. The company has a P/E ratio of 3.3, equal to the average diversified services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Bridgepoint has a market cap of $472.3 million and is part of the services sector and diversified services industry. Shares are down 61.2% year to date as of the close of trading on Tuesday.

You can view the full Bridgepoint Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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