UPDATE: BMO Capital Markets Reiterates Outperform Rating, Raises PT on Grand Canyon Education on 4Q12 EPS
In a report published Wednesday, BMO Capital Markets reiterated its Outperform rating on Grand Canyon Education (NASDAQ: LOPE), and raised its price target from $28.00 to $30.00.
BMO Capital Markets noted, “The “upside surprise” (at least versus our estimates) was mostly revenue driven. Revenues of $141.3 million were above guidance of $135-$136 million driven by a 19.1% y/y increase in ending enrollment – well above our 17% estimate (no consensus available) and representing the best y/y growth since 2Q10. New enrollments increased in the “high-single-digit range.” Operating margins of 23.5% were at the low end of 23.5%-24% guidance and roughly in line with our 23.7% estimate. We believe LOPE's competitive and differentiated position continues to be effective in bucking the overall weak industry trends afflicting its competitors. Management discussed a potential new satellite campus (fall 2014 open?) to attract students living outside commutable distances from its current location, which could spur growth in later years.”
Grand Canyon Education closed on Tuesday at $25.56.
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