Grand Canyon Education is Thursday's IBD Stock Of The Day, as the education services provider rallies near a buy point as former President Donald Trump appears to be the front-runner in the 2024 presidential election. LOPE shares angled higher Thursday.
At the end of the first quarter, Grand Canyon Education had more than 118,000 enrolled students. Meanwhile, Grand Canyon University (GCU), the largest Christian university in the U.S., pays about 60% of its tuition and fee revenue to Grand Canyon Education, or GCE, for services including marketing, recruitment and student counseling.
Grand Canyon Education stock rallied sharply after the election of Donald Trump in November 2016, which beckoned in the for-profit-friendly Education Secretary Betsy DeVos.
Since 2020, the company has also seen its annual profit grow 26% to $7.04 per share in 2023 while revenue has increased 14%. Analysts project annual EPS will gain another 20% by 2025, according to FactSet.
Biden Administration Cracks Down
However, under President Joe Biden, Grand Canyon University and Grand Canyon Education have been sued by the Federal Trade Commission (FTC) and fined $37.7 million by the Education Department for allegedly misleading students about costs and misrepresenting itself as a nonprofit institution.
In December 2023, the FTC filed suit vs. Grand Canyon Education, Grand Canyon University, and CEO Brian Mueller for "deceiving prospective doctoral students about the cost and course requirements of its doctoral programs and about being a nonprofit, while also engaging in deceptive and abusive telemarketing practices."
GCU and Mueller have appealed the Education Department fine and vehemently deny the allegations from federal regulators.
In April, Education Secretary Miguel Cardona told the House Appropriations Committee that in regards to Grand Canyon University, the Biden administration is "cracking down not only to shut them down, but to send a message to not prey on students."
Grand Canyon Education Stock Performance
LOPE shares advanced 1.7% to 152.43 during market action on Thursday. Grand Canyon Education stock has a 153.66 buy point from a cup-with-handle base, according to MarketSurge analysis. The stock has gained 16% in 2024. LOPE stock is flirting with a record closing price.
The company reports second-quarter earnings and revenue on Aug. 6. Analyst consensus has Grand Canyon Education Q2 EPS growing 9% to $1.10 with sales totaling $224 million, up 6% compared to Q2 2023, according to FactSet.
That would snap a four-quarter run of slowly accelerating revenue growth.
Meanwhile, analysts project LOPE ended Q2 with 105,006 students enrolled at Grand Canyon University, a 7% increase vs. a year ago.
For the full year, Grand Canyon Education forecasts EPS of $7.57-$8.04. The company projects revenue totaling $1.02 billion to $1.042 billion in 2024. Those would be up from $7.04 per share on $961 million in sales in 2023.
The stock has a 95 Composite Rating out of a best-possible 99. Shares have an 86 Relative Strength Rating and an 89 EPS Rating.
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