August 19, 2020
Incorporating technology to create immersive and effective learning experiences virtually has become significantly more important to educational institutions in recent months. Several U.S.-based publicly traded educational services providers are at the leading edge of virtual learning and as a result, are reporting increased student enrollments and revenues. With no indication that this trend will reverse itself, here are a few American public companies that are positioned to benefit as a result of the movement toward virtual learning:
Adtalem Global Education (Tii:ATGE) With a focus on healthcare and financial services education – two areas increased relevance as a result of the pandemic – Chicago-based Adtalem (formerly the DeVry Education Group) is a leading workforce solutions provider. The company is the parent organization of Association of Certified Anti-Money Laundering Specialists, Becker Professional Education, Chamberlain University, EduPristine, OnCourse Learning, Ross University School of Medicine and Ross University School of Veterinary Medicine. Adtalem institutions make extensive use of simulated learning environments with significant subject matter expertise in online curriculum development, pedagogy and student support.
Bright Horizons Family Solutions (Tii:BFAM) Though not a pure-play in the education space, Massachusetts-based Bright Horizons is not only the largest provider of employer-sponsored childcare but also a major provider of early education (preschool, kindergarten prep and toddler care/education). The company expanded its portfolio of Digital Care Solutions earlier this month with the acquisition of Sittercity Business, a leading online marketplace for families and caregivers. This effectively expands the company’s flexible care options, including babysitters and virtual tutors.
Chegg Inc. (Tii:CHGG) Based in Santa Clara, California, Chegg is a leading direct-to-student learning platform. The company also provides digital and physical textbook rentals, online tutoring, and other student services. This is another company experiencing increased student enrollment as a result of its digital platform. For its fiscal second quarter ended June 30, 2020, Chegg's total net revenues rose 63 percent year-over-year as a direct result of a 67 percent increase in subscribers.
Grand Canyon Education, Inc. (Tii:LOPE) Based in Phoenix, Grand Canyon Education provides education services to 25 universities. These services include marketing, strategic enrollment management, counseling services, financial services, technology, technical support, compliance, human resources, classroom operations, curriculum development, faculty recruitment and training. The company recently reported a 6.3% year-over-year rise in service fee revenue, primarily due to an increase in enrollments at its university partners.
K12 Inc. (Tii:LRN) On August 11, the Herndon, Va.-based tech-enabled K-12 education company reported that revenues for its fiscal year ended June 30, 2020, increased to $1,040.8 million, compared to $1,015.8 million on increased enrollments and a strategic acquisition. In the annual report, K12 CEO and Chairman Nate Davis estimated further growth ahead. “As we approach the new school year, we’re preparing for increased student enrollments by hiring more teachers and expanding our learning platform ... We are therefore positioned to deliver double-digit growth in both revenues and adjusted operating income in the coming year.”
Perdoceo Education Corporation (Tii:PRDO) An Illinois-based for-profit postsecondary higher education provider, Perdoceo offers programs in a variety of disciplines through online, campus-based, and blended learning platforms. The company's two universities -- American InterContinental University and Colorado Technical University – provide degree programs through the master’s or doctoral level as well as associate and bachelor’s levels. In the company's most recent annual report, it reported a 12.5 percent rise in revenue to $176.0 million for its fiscal year ended June 30, 2020, with a 45.3 percent increase in new student enrollments.
Strategic Education, Inc. (Tii:STRA) With two learning institutions under its umbrella, Herndon, Va.-based Strategic Education offers bachelor’s, master’s, and doctoral programs through the regionally accredited online Capella University and Strayer University. With current education trends being what they are, the company is turning acquisitive, having announced in late July that it entered into a definitive agreement to acquire the Australia and New Zealand academic operations of Laureate Education, Inc. (Tii:LAUR) for $642.7 million in cash.
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