UPDATE: Compass Point Initiates Coverage on Higher One Holdings as Risk is More Tilted to Downside

In a report published Tuesday, Compass Point analyst Michael Tarkan initiated coverage on

with a Sell rating and $6.50 price target. In the report, Compass Point noted, “We are initiating coverage of Higher One Holdings, Inc. (ONE) with a Sell rating and $6.50 price target. We expect continued fee pressure, a deceleration of macro growth drivers, and ongoing regulatory risk to remain key overhangs on the stock. Operationally, we expect management to continue to adjust fees to appease regulators, the sales cycle for new campus expansion to extend further, and growth drivers of enrollment, tuition, and federal student aid to continue to slow. From a regulatory perspective, the upcoming Department of Education (ED) negotiated rulemaking may be transformational, and while there could be some positive resolutions, risk is more tilted to the downside, in our view.” Higher One Holdings closed on Monday at $8.05.