Career Education Corp

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CECO : NASDAQ : Services
$6.66 | %
Today's Range: 6.62 - 6.75
Avg. Daily Volume: 390,400
07/22/16 - 4:00 PM ET

Financial Analysis


CAREER EDUCATION CORP's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased. CAREER EDUCATION CORP has strong liquidity. Currently, the Quick Ratio is 1.59 which shows the ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has greatly increased by 32.35% from the same quarter last year. The key liquidity measurements indicate that the company is unlikely to face financial difficulties in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)198.89227.01
EBITDA ($mil)13.79-11.55
EBIT ($mil)7.22-18.34
Net Income ($mil)3.01-24.88


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)182.13206.37
Total Assets ($mil)550.24529.63
Total Debt ($mil)0.00.0
Equity ($mil)341.41257.95


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin69.0667.01
EBITDA Margin6.93-5.08
Operating Margin3.63-8.08
Sales Turnover1.491.78
Return on Assets14.49-27.35
Return on Equity23.61-56.37
Debt Q1 FY16 Q1 FY15
Current Ratio1.731.8
Debt/Capital0.00.0
Interest Expense0.240.16
Interest Coverage30.58-113.2


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)68.3467.66
Div / share0.00.0
EPS0.04-0.36
Book value / share5.03.81
Institutional Own % n/a n/a
Avg Daily Volume426821.0583570.0

Valuation


HOLD. CAREER EDUCATION CORP's P/E ratio indicates a significant discount compared to an average of 39.72 for the Diversified Consumer Services industry and a significant discount compared to the S&P 500 average of 25.03. To use another comparison, its price-to-book ratio of 1.36 indicates a discount versus the S&P 500 average of 2.80 and a significant discount versus the industry average of 27.72. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. Upon assessment of these and other key valuation criteria, CAREER EDUCATION CORP proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CECO 5.82 Peers 39.72   CECO NM Peers 21.39

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

CECO is trading at a significant discount to its peers.

 

Neutral. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CECO's P/CF is negative making the measure meaningless.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CECO NM Peers 23.87   CECO NM Peers 1.56

Neutral. The absence of a valid price-to-projected earnings ratio happens when a stock can not be valued on the basis of a negative expected future earnings.

CECO's ratio is negative making this valuation measure meaningless.

 

Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CECO's negative PEG ratio makes this valuation measure meaningless.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CECO 1.36 Peers 27.72   CECO 154.16 Peers -46.93

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CECO is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

CECO is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CECO 0.57 Peers 2.52   CECO -13.12 Peers 9.42

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CECO is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

CECO significantly trails its peers on the basis of sales growth

 

 

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