K12 (LRN) Q4 Earnings & Revenues Beat on Strong Enrollment
K12 Inc. LRN reported impressive results for fiscal fourth-quarter 2020, wherein both the top and bottom lines topped the Zacks Consensus Estimate, as well as grew on a year-over-year basis. The upside was mainly driven by solid enrollments and acquisition synergies. Shares of this leading tech-enabled education company grew 7.3% in the after-hours trading session on Aug 11.
K12’s CEO and chairman Nate Davis said, “As we approach the new school year, we’re preparing for increased student enrollments by hiring more teachers and expanding our learning platform. Managed public school enrollments are already 150 thousand, as of August 7th, and we are entering what has historically been the busiest part of our enrollment season. We are therefore positioned to deliver double-digit growth in both revenue and adjusted operating income in the coming year.”
The company reported adjusted earnings of 12 cents per share, which comfortably topped the consensus estimate of 3 cents by 300% and increased a whopping 50% on a year-over-year basis. Excluding the impact of the acquisition of Galvanize, the metric would have been 31 cents per share.
K12 Inc Price, Consensus and EPS Surprise
K12 Inc price-consensus-eps-surprise-chart | K12 Inc Quote
Revenues & Enrollment Discussion
Total revenues of $268.9 million surpassed the consensus mark of $262 million by 2.6% and grew 4.9% from the year-ago period. The upside was backed by increased enrollments, the Galvanize acquisition and revenues recognized on the resolution of claims related to prior period services.
Managed Public School Programs’ revenues of $234.6 million grew 4.6% from the year-ago period. Private Pay Schools and Other revenues rose 82.3% year over year to $16.4 million. However, Institutional Programs’ revenues declined 22.2% from the prior year to $17.9 million.
Managed Public School Programs’ enrollment increased 5.6% from the prior-year quarter. However, Non-managed Public School Programs’ enrollment fell 33.5% year over year during the quarter.
Operational Highlights
Instructional costs and services, as a percentage of revenues, decreased 260 basis points to 66%.
Adjusted operating income of $12.9 million increased 79.2% year over year. Adjusted EBITDA also increased 26.8% from the year-ago period to $32.2 million.
Financials
As of Jun 30, 2020, K12 had total cash, cash equivalents and restricted cash of $213.3 million compared with $284.6 million at fiscal 2019-end. Capital expenditure totaled $45 million for the fiscal year compared with $48.4 million in the year-ago period.
Fiscal 2020 Highlights
Earnings for the fiscal year were 60 cents per share, down from 91 cents reported a year ago. Revenues of $1,040.8 million were up 2.5% year over year. Excluding acquisitions, earnings and revenues grew 3.3% and 1.4% from the prior year, respectively.
Zacks Rank & Peer Releases
K12, which shares space with Adtalem Global Education Inc. ATGE in the Zacks Schools industry, currently carries a Zacks Rank #3 (Hold). You can the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Strategic Education, Inc. or SEI STRA reported stellar results for second-quarter 2020, wherein earnings and revenues not only topped analysts’ expectations but also grew from the year-ago level. The uptick was mainly backed by strong top-line numbers, and margins in Strayer and Capella universities.
American Public Education, Inc. APEI reported impressive second-quarter 2020 results, wherein both the top and bottom lines topped the Zacks Consensus Estimate, as well as grew on a year-over-year basis. Notably, the metrics exceeded management’s respective guidance on the back of enrollment growth across the segments and the ongoing turnaround at Hondros.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Strategic Education Inc. (STRA) : Free Stock Analysis Report
American Public Education, Inc. (APEI) : Free Stock Analysis Report
K12 Inc (LRN) : Free Stock Analysis Report
Adtalem Global Education Inc. (ATGE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
