CPLA write up - Capella Education Company CPLA Price...

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Capella Education Company CPLA Price: $84.25 ($45.15-85.43) Fiscal Year Ends: December 31 March 4, 2010 David Zakutansky Russell 2000: 649.02 (342.59-653.88) Business Services Sector Capella Education Company provides exclusive online post secondary education to over 34,000 students in the United States focusing on master and doctoral programs that represent 80% of the student population. The company educates in four main professions including Business Management and Technology, Education, Behavioral Health and Human Services, and Public Service Leadership. CPLA caters to underserved markets that would provide the company with opportunity to differentiate from competitors. As of December 31, 2009, CPLA offered over 1,050 courses online, 36 academic programs, and 124 different specializations. These numerous specializations cater to the working adult in the various professional markets they work in. CPLA will continue to lead the market in online post secondary education because of its ability to define high quality learning online for working adult professionals. Recommendation Key Statistics March 4, 2010 Market Cap $1,410.02M Shares Outstanding 16.722M Ave. Volume (3 month) 142,402 Adjusted Beta .827 EPS (TTM) $2.50 2010 Estimated EPS $4.02 P/E (TTM) 33.74 PEG Ratio .90 WACC 9.23% Debt/Assets 0 ROE 26.25% ROA 20.76% Gross Margin 59.57% Operating Margin 19.10% Analyst Coverage 18 Target Price $105 Source: Bloomberg CPLA has one of the strongest online platforms ready and able to take advantage of the growing number of working adults considering postsecondary education online. With online enrollment in the United States at 2 million students with expectations of this figure doubling in the next four years, CPLA’s dedicated management and academic development teams are prepared to their market share from the 1.5% of the total post secondary students enrolled in the four areas the company serves. CPLA posted revenue and net income CAGRs of 17.53% and 33.01% for the last five years and is leveraging their
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CPLA write up - Capella Education Company CPLA Price...

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