The firm said it raised its rating on the post-secondary education services provider based on its belief DeVry's 2015 earnings will turn positive.
Must Read: Warren Buffett's 25 Favorite Stocks
"We rate DEVRY EDUCATION GROUP INC (DV) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
Separately, TheStreet Ratings team rates DEVRY EDUCATION GROUP INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
- DV has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.40, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has increased to $150.09 million or 46.83% when compared to the same quarter last year. In addition, DEVRY EDUCATION GROUP INC has also vastly surpassed the industry average cash flow growth rate of -17.62%.
- The gross profit margin for DEVRY EDUCATION GROUP INC is rather high; currently it is at 55.61%. Regardless of DV'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 11.19% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Diversified Consumer Services industry average. The net income has decreased by 2.3% when compared to the same quarter one year ago, dropping from $56.82 million to $55.53 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Diversified Consumer Services industry and the overall market, DEVRY EDUCATION GROUP INC's return on equity is below that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: DV Ratings Report
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts