CECO  Career Education Corporation

Exchange

NASDAQ

Sector

Consumer Services

Industry

Other Consumer Services

Market Cap.

694.21M

Vuru Grade

24.50/100

Current Price

$10.05
+0.09 (+0.90%)

Growth Price

$4.82
Overvalued by 52.04%

Stability Price

$7.07
Overvalued by 29.61%

Company Metrics

  • P/E 3.57
  • P/S 1.09
  • P/B 2.05
  • EPS -0.36
  • Cash ROIC -30.45%
  • Cash Ratio 1.22
  • Dividend 0 / 0%
  • Avg. Vol. 241,731.00
  • Shares 69.08M
  • Market Cap. 694.21M

Company Description

Career Education Corporation, through its subsidiaries, provides educational services primarily in the United States. The company operates schools, colleges, and universities that offer doctoral degree, master's degree, bachelor's degree, and associate degrees, as well as diploma and certificate programs in various career oriented disciplines. Its academic programs include career oriented discipli... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Career Education Corporation: Multibagger Opportunity In The Near Term
Seeking Alpha - Feb 28, 2017
Arguably, the most burdensome of the rules the Department of Education passed. These rules prohibited companies from providing incentive compensation based around student enrollment.
Career Education Corp's (CECO) CEO Todd Nelson on Q2 2017 Results - Earnings ...
Seeking Alpha - Aug 9, 2017
Good morning and welcome to the Second Quarter 2017 Career Education Earnings Conference Call. [Operator Instructions]. Please note this event is being recorded.
Career Education Corporation - ROE 49.57%, One-Third Of Pure Cash, And No Debt
Seeking Alpha - Feb 17, 2017
Career Education Corporation has an outstanding balance sheet with no debt and tons of cash and impressive net income generation.
Career Education Corporation Announces Departure of Chief Financial Officer
Business Wire (press release) - Sep 21, 2017
SCHAUMBURG, Ill.--(BUSINESS WIRE)--Career Education Corporation (NASDAQ: CECO), a provider of postsecondary education programs, today announced that A.J.
Career Education (CECO) Announces Departure of CFO AJ Cederoth - StreetInsider.com
Career Education Corporation (NASDAQ:CECO) Experiences Light Trading Volume
Modern Readers - 11 hours ago
Trading volume for Career Education Corporation was 1,495 by the end of trading on Tuesday. Trading volume was down 99.51% under the stocks average daily volume.
Contrasting Career Education Corporation (CECO) and American Public Education ... - The Ledger Gazette
Career Education Corporation (NASDAQ:CECO) Trading Volume Significantly Lower - Highlight Press
Small For-Profit Chain Closes 7 Campuses
Inside Higher Ed - Sep 12, 2017
Delta Career Education Corporation, a privately held for-profit college company, is phasing out seven of its campuses. The company blamed the move on the unclear fate of the Accrediting Council for Independent Colleges and Schools, a national ...
Career Education Corporation (NASDAQ:CECO) Sees Significantly Lower Trading Volume
First News 24 - 8 hours ago
1,495 shares changed hands in the last trading session. Overall, volume was down 99.51% under the stocks normal daily volume. Traders are feeling more bearish on the company lately looking at the rise in short interest.
Head to Head Analysis: Career Education Corporation (CECO) versus Its Competitors
The Ledger Gazette - Sep 24, 2017
Career Education Corporation (NASDAQ: CECO) is one of 19 publicly-traded companies in the “General Education Services” industry, but how does it contrast to its competitors?
Career Education Corporation (CECO) Receives Media Impact Score of 0.25 - Dispatch Tribunal
Analyzing Career Education Corporation (CECO) & Apollo Education Group (APOL) - StockNewsTimes
Career Education Corp (CECO) Moves -0.71%
BVN - 16 hours ago
Shares of Career Education Corp (CECO) is moving on volatility today -0.71% or -0.07 from the open. The NASDAQ listed company saw a recent bid of 9.835 on 70270 volume.
Career Education Corporation (NASDAQ:CECO) Closed Higher Than Its 50 Day Average
Modern Readers - Sep 23, 2017
Investors are feeling more bearish on Career Education Corporation of late as indicated by the uptick in short interest. The company experienced a rise in short interest of 23.73% as of August 31, 2017 from the last reporting period.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for CECO to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate CECO's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$10.05 Current Price

$4.82 Growth Price (DCF)

Overvalued by 52.04%


Growth Rate Assumed by Market: 84.47%


Future Free Cash Flow Growth Rate: 0.0%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$7.07 Stability Price (EPV)

Overvalued by 29.61%


Discount Rate: 15.0%

$0.15 NCA Price

Overvalued by 98.55%

$5.75 Book Price

Overvalued by 42.79%


Very Poor Cash Return on Invested Capital over the past 5 years

CECO has failed to generate positive returns on its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

CECO has lost $30.45 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow -54.74M -105.44M -131.78M -33.38M 1.78M
divided by
Invested Capital 465.55M 247.08M 155.66M 236.29M 184.60M
Cash ROIC -11.76% -42.67% -84.66% -14.13% 0.97%

Very Poor Return on Equity over the past 5 years

CECO has shown an inability to deliver results for shareholders. This could be due to poor management, CECO operating in a highly competitive industry, or having a weak business in general.

CECO has generated a $22.61 loss for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income -142.80M -164.26M -178.16M 51.89M -18.71M
divided by
Stockholders' Equity 611.79M 455.38M 281.93M 337.61M 321.50M
Return on Equity -23.34% -36.07% -63.19% 15.37% -5.82%

Mediocre Business Performance over the past 10 years

CECO isn't a strong business and might be consistently attempting to fuel growth with debt or has trouble staying profitable. The lack of predictability in free cash flow should be concerning for the reliability of future earnings.

CECO has been unable to consistently create value for shareholders.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 144.23M 132.87M 214.16M 144.98M 152.12M -54.74M -105.44M -131.78M -33.38M 1.78M

Strong Balance Sheet

CECO is financially strong with Current Assets covering Total Liabilities. It's in a fairly liquid position and dependent on the amount and saleability of any inventory; it may have the financial security to survive an economic downturn.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 382.10M 508.70M 484.85M 449.15M 441.20M 304.44M 350.54M 216.69M 181.82M 205.79M
Current Assets 587.40M 667.47M 628.84M 619.36M 610.48M 543.56M 460.02M 380.80M 288.96M 248.19M
Total Assets 1.37B 1.42B 1.56B 1.56B 1.32B 1.12B 805.05M 573.53M 610.92M 559.60M
Current Liabilities 370.61M 355.30M 442.01M 464.07M 329.44M 352.72M 207.43M 201.18M 192.81M 169.21M
Total Liabilities 480.36M 469.67M 642.32M 626.47M 510.14M 510.91M 349.66M 291.60M 273.31M 238.10M
Stockholder' Equity 886.11M 947.65M 921.52M 934.38M 805.98M 611.79M 455.38M 281.93M 337.61M 321.50M
Current Ratio 1.58 1.88 1.42 1.33 1.85 1.54 2.22 1.89 1.50 1.47
TL-to-TA 0.35 0.33 0.41 0.40 0.39 0.46 0.43 0.51 0.45 0.43

Low or No Reinvestment of Profits over the past 10 years

CECO has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to CECO operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 736.60M 807.50M 889.06M 356.99M 375.61M 232.92M 68.66M -109.40M -57.52M -76.23M
Retained Earnings Growth - 9.62% 10.10% -59.85% 5.21% -37.99% -70.52% -259.34% 47.43% -32.53%

Loss Making Entity over the past 10 years

CECO has been unable to maintain profitability. It's Costs of Sales have outstripped Revenue consistently. This is a huge red flag, unless the company has been investing heavily for the future. However, even that is dubious since accurately predicting the future of a company like that is extremely difficult.

$2.58 of every $100 of Revenue have been a loss, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 59.55M 60.14M 81.22M 157.77M 18.57M -142.80M -164.26M -178.16M 51.89M -18.71M
divided by
Revenue 1.67B 1.71B 1.84B 2.12B 1.88B 1.49B 1.06B 741.36M 847.27M 704.39M
Net Profit Margin 3.56% 3.53% 4.42% 7.43% 0.99% -9.59% -15.54% -24.03% 6.12% -2.66%

Strong Pricing Power over the past 10 years

CECO has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$68.60 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 1.08B 1.05B 1.22B 1.49B 1.88B 918.10M 651.08M 500.56M 557.50M 469.29M
divided by
Revenue 1.67B 1.71B 1.84B 2.12B 1.88B 1.49B 1.06B 741.36M 847.27M 704.39M
Gross Margin 64.56% 61.63% 66.69% 69.91% 100.00% 61.65% 61.58% 67.52% 65.80% 66.62%

High Capital Intensity over the past 10 years

CECO spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

133.74% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 57.59M 53.85M 74.09M 127.28M 78.33M 37.94M 19.64M 13.16M 11.70M 4.13M
divided by
Net Income 59.55M 60.14M 81.22M 157.77M 18.57M -142.80M -164.26M -178.16M 51.89M -18.71M
Capital Expenditure Ratio 96.70% 89.54% 91.22% 80.67% 421.76% -26.57% -11.95% -7.38% 22.54% -22.07%

No Dividend History over the past 10 years

CECO has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 94.41M 90.09M 86.42M 80.85M 74.50M - - 67.17M 68.33M 68.37M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 25.10 17.99 23.28 21.01 7.97 3.31 5.65 6.89 3.74 10.09
Dividend Yield - - - - - - - - - -

History of Stock Buybacks over the past 10 years

CECO has some history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 94.41M 90.09M 86.42M 80.85M 74.50M - - 67.17M 68.33M 68.37M
Stock Bought Back - 4.79% 4.25% 6.89% 8.53% - - -100.00% -1.69% -0.07%
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