Tag Archives: COCO

Chart of the Week: Do Your Remember When APOL Was Known For Enrolling High Quality Working Adults?

February 21, 2010 – 2:49 pm

Our entry for chart of the week is sure to send a painful reminder to shareholders of APOL about Friday’s sell-off.  APOL provided initial guidance for its 2Q10 earnings which were well below consensus expectations.  The primary culprit – bad debt expense.  APOL management expects bad-debt expense as a percentage of revenue to be 6.8-7.1% [...]

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COCO Continues to Struggle With High Cohort Default Rates – “Self Regulation” Is Not Only Likely, It’s Necessary

February 9, 2010 – 11:33 am

In an 8-K filing this morning, COCO disclosed its draft 2-year cohort default rate (CDR) data for FY08, which was released to schools yesterday.   Under the 2-year definition cohort default rates must not exceed 25% for any school for three consecutive years, or 40% in any single year, or that institution will lose access to federal financial [...]

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Quick Comments on COCO’s 2Q10 Results: Higher Retention Sparks Revenue Upside, Starts Fall Short, EPS Beat Driven by Facility Leverage, Lower Cost-per-Start – When Are We Going to Get Real Bad-Debt Expense Disclosure?

February 2, 2010 – 10:35 am

COCO reported 1Q10 results this morning.  You can read the full press release here. Overall the company delivered upside to consensus on both the top and bottom-line, which should not come as a surprise given the strong results delivered by ESI and DV already this earnings season.  Revenues and EPS of $414.3 million and $0.44 beat [...]

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PAA Research For-Profit Education Survey Suggests Enrollment Growth for the Winter Term Remained Robust, Some Slowdown Expected in 2010, and Some Schools Have Already Introduced “Self Regulation”

January 26, 2010 – 4:39 pm

We recently conducted a survey of privately-held for-profit postsecondary education institutions.  Our goal was to gain a better understanding of enrollment trends, identify which programs are resonating most with the education consumer, evaluate lead flow trends, learn more about cost-per-lead expectations in 2010, and to determine how institutions are preparing for the transition from a [...]

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The Dept. of Education Fires A Shot Across the Bow of the Higher Learning Commission (HLC)

December 17, 2009 – 4:33 pm

The education stocks are trading off today following the release of a memorandum from the Department of Education’s Office of Inspector General (OIG).   You can find the memorandum here.  Effectively the OIG has asked the Department of Education to review the status of the HLC and potentially “limit, suspend, or terminate HLC’s recognition by the [...]

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Unofficial FY07 3-Year Cohort Default Rates Come In-line With Expectations, Now Comes the Hard Part for COCO and WPO

December 14, 2009 – 6:51 pm

The Department of Education released unofficial 3-year cohort default rate data this morning.  You can find the DOE’s press release here, which also contains a link to an excel file with school by school 3-year cohort default rate data.  Overall, the data was more or less inline with our expectations.  The addition of an extra [...]

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Preparing for the Release of Unofficial 3-Year Cohort Default Rate Data – Follow the Script, At the Very Least Self-Regulation Is on Its Way

December 9, 2009 – 12:37 pm

We have expressed our concerns in the past about the impact the transition from a 2-year to a 3-year cohort default rate calculation could have on the for-profit education sector.  As a reminder, as part of the Higher Education Opportunity Act of 2008 the calculation of the cohort default rate was expanded from 2-years to [...]

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Details of Department of Education Negotiated Rulemaking Proposals Leak Out – Incentive Comp and Program Affordability Changes Would Have Large Implications

December 1, 2009 – 12:37 pm

The U.S. Department of Education (DOE) distributed its first round of proposals to the negotiated rulemaking panel on Monday on Program Integrity Issues in the higher education space.  The initial hearings for this year’s negotiated rulemaking sessions were held from November 2-6.  You can find more details on the initial hearings and the schedule for subsequent [...]

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WPO’s 3Q09 Results, What is an Enrollment at Kaplan? COCO’s 10-Q Filing

October 30, 2009 – 4:16 pm

We wanted to address a few issues related the for-profit education sector: WPO’s 3Q09 results, a few thoughts on COCO’s 10-Q filing and a playbook for the Negotiated Rulemaking sessions (NegReg) to be held next week.
Washington Post Company is a For-Profit Education Company That Also Owns Newspaper, Cable, Magazine and Broadcasting Businesses, Please Act Accordingly…
We continue [...]

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Apollo Group’s 4Q09 Results Send Shockwaves: Could the SEC Inquiry Relate to Accounting for Student Withdrawals? APOL Backs Away From Lower Quality Students

October 28, 2009 – 1:08 am

Readers of our research know that we have been bearish on the for-profit education sector for the past few quarters based on our concerns about growing fundamental headwinds, increasing regulatory scrutiny, and what we view as significant structural issues for a few operators in the sector. Outside of our analysis of COCO’s bad-debt expense recognition, [...]

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