Career Education Corporation operates colleges, institutions, and universities that provide education to student population in various career-oriented disciplines through online, campus based, and blended learning programs in the United States.
The last earnings update was 39 days ago.
Discounted Cash Flow Calculation for DB:CE1 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:CE1 DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Career Education's share price is below the future cash flow value, and at a moderate discount (> 20%).
Career Education's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Career Education's earnings available for a low price, and how does
this compare to other companies in the same industry?
Career Education's earnings are expected to grow by 15.2% yearly, however this is not considered high growth (20% yearly).
Career Education's revenue is expected to grow by 3.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Career Education's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
3/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Career Education's finances.
The net worth of a company is the difference between its assets and liabilities.
Career Education is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Career Education's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Career Education's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Low level of unsold assets.
Career Education has no debt, it does not need to be covered by short term assets.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Todd S. Nelson has been the Chief Executive Officer and President of Career Education Corp. since August 12, 2015. Mr. Nelson served as the Chief Executive Officer of Education Management LLC since February 2007 until August 2012. He served as the Chief Executive Officer of Education Management Corporation (EDMC) from February 2, 2007 to August 15, 2012. He served as the President of Education Management LLC, from February 20, 2007 to December 2008 and Education Management LLC since February 2007. He was an Independent Consultant of EDMC from January 2006 to January 2007 and for Apollo Group, Inc. (alternate name Apollo Education Group, Inc.) from 1987 to January 2006. Mr. Nelson served as Chief Executive Officer of Apollo Group Inc. from August 2001 to January 2006, President from February 1998 to January 2006 and its Chairman of the Board from June 2004 to January 12, 2006. He joined Apollo in 1987 as Director of the University of Phoenix's Utah campus. He served as Vice President of Apollo Group Inc. from 1994 to February 1998 and an Executive Vice President of University of Phoenix from 1989 to February 1998. Mr. Nelson’s career has focused on the for-profit education industry for nearly 30 years. Mr. Nelson has experienced and led strategic growth initiatives during his prior industry positions, which provides insight and perspective as the Company implements its transformation strategy and seeks a return to sustainable growth. Mr. Nelson served as General Manager of Amembal and Isom from 1985 to 1987. He served as a General Manager for Vickers & Company from 1984 to 1985. He has extensive experience in higher education and distance learning. Mr. Nelson served as a Marketing Director of Summa Corporation from 1983 to 1984. He served as the Chairman of the Board at Education Management Corporation from August 15, 2012 to November 8, 2013 and served as its Director from February 20, 2007 to November 8, 2013. Mr. Nelson serves as a Member of Advisory Board at Clickety-Split, Inc. Mr. Nelson has been a Director of Career Education Corp. since August 12, 2015 and served as Director of Education Management LLC since February 2007 until November 2013. He served as a Director of Hypercom Corporation from April 3, 2006 to October 10, 2006 and Apollo Group Inc. until January 2006. He served as a Director of Voyager Learning Company (formerly ProQuest Co.) from January 4, 2004 to February 7, 2008. From 1987 to 1989, he served as a Director of University of Phoenix's Utah campus. He was a Member of the faculty at University of Nevada at Las Vegas from 1983 to 1984. Mr. Nelson holds a Masters degree in Business Administration from the University of Nevada and a Bachelor of Science degree from Brigham Young University.
Todd's compensation has increased in line with Career Education recently becoming profitable.
Todd's remuneration is higher than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Career Education management team is about average.
Senior VP & CFO
Senior Vice President of American Intercontinental University
Senior Vice President of Colorado Technical University
VP of Accounting & Reporting and Chief Accounting Officer
Senior VP & Chief Information Officer
Chief Marketing Officer
Senior VP & Chief Human Resources Officer
Managing Director of Gibbs Division and Vice President of Gibbs Division
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Career Education board of directors is about average.
Career Education Corporation operates colleges, institutions, and universities that provide education to student population in various career-oriented disciplines through online, campus based, and blended learning programs in the United States. It operates through three segments: Colorado Technical University, American InterContinental University, and All Other Campuses. The company offers doctoral, master’s, bachelor’s, and associate degrees, as well as certificate programs. It also provides academic programs in the career-oriented disciplines of business studies, nursing, computer science, engineering, information systems and technologies, cybersecurity, criminal justice, and healthcare management; and educational programs in culinary arts, as well as patisserie and baking. As of December 31, 2018, the company had a total student enrollment of approximately 34,400 students. Career Education Corporation was founded in 1994 and is headquartered in Schaumburg, Illinois.
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