FBR Capital Reiterates an 'Underperform' on Corinthian Colleges (COCO); Outlook Weakens As 90/10 and CDR Pressure Grows
COCO Hot Sheet
Rating Summary:3 Buy, 6 Hold, 1 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 20 | Down: 11 | New: 38
FBR Capital reiterates an 'Underperform' rating on Corinthian Colleges, Inc. (Nasdaq: COCO), PT $4.00.
FBR analyst says, "In our view, the company's recruiting of lower-quality students over the past few years has effectively boxed it in, pushing it up against 90/10 limits and driving CDRs higher and repayment rates lower. As a result, despite the meaningful underperformance in the shares year to date, we continue to see real risk to earnings and limited upside potential, as we expect enrollment pressure to exacerbate the impact of negative leverage on the company's earnings power...We are reducing our FY11 and FY12 estimates to $1.04 and $0.40, respectively, from $1.30 and $0.74, in order to reflect further declines in enrollment, coupled with higher costs related to advertising, default management, student retention, and completion."
To see all the upgrades/downgrades on shares of COCO, visit our Analyst Ratings page.
Shares finished trading at $4.89 yesterday.
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FBR analyst says, "In our view, the company's recruiting of lower-quality students over the past few years has effectively boxed it in, pushing it up against 90/10 limits and driving CDRs higher and repayment rates lower. As a result, despite the meaningful underperformance in the shares year to date, we continue to see real risk to earnings and limited upside potential, as we expect enrollment pressure to exacerbate the impact of negative leverage on the company's earnings power...We are reducing our FY11 and FY12 estimates to $1.04 and $0.40, respectively, from $1.30 and $0.74, in order to reflect further declines in enrollment, coupled with higher costs related to advertising, default management, student retention, and completion."
To see all the upgrades/downgrades on shares of COCO, visit our Analyst Ratings page.
Shares finished trading at $4.89 yesterday.
Discover Wall Street's best ratings calls with the pros - Ratings Insider Elite. Free Trial!
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