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Grand Canyon Education, Inc. Message Board

  • CutToIt CutToIt Apr 28, 2009 10:51 AM Flag

    BPI vs LOPE

    why wouldn' you chose to own BPI over LOPE? If you can stomach the volatility associated with this sector, BPI really stands out. relative to cpla, lope and apei, the company has exhibited much higher historical growth. on top of this, the valuation is lower than online peers due, in part, to lack of sponsorship. this will change when the underwriters roll out coverage during the next 30 days or so.

    i believe most recommendations will support upside price objective of at least $17. this would place the valuation on par with online peers while still not giving gull credit for higher growth rate.

    bpi will be reporting qtrly results in late may sometime..

    here's a look at my estimate for valuation. all figures are on 09

    bpi -- 10x ebitda, 17x eps
    apei -- 14x ebitda, 29x eps
    lope -- 14x ebitda, 28x eps
    cpla -- 11x ebitda, 22x eps

    meanwhile, below is rate of growth in enrollment for latest published year

    bpi -- +150%
    apei -- +50%
    lope -- +67%
    cpla -- +21%

    if the strong growth continues, BPI is a screaming buy anywhere below $15.. Dramatic upside potential with lack of meaningful downside.. therefore, a very attractive risk-reward.

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