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Does Grand Canyon Education, Inc.'s (NASDAQ:LOPE) Recent Track Record Look Strong?

Simply Wall St

Measuring Grand Canyon Education, Inc.'s (NasdaqGS:LOPE) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess LOPE's recent performance announced on 30 June 2019 and weigh these figures against its long-term trend and industry movements.

View our latest analysis for Grand Canyon Education

Did LOPE's recent earnings growth beat the long-term trend and the industry?

LOPE's trailing twelve-month earnings (from 30 June 2019) of US$234m has increased by 2.8% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 18%, indicating the rate at which LOPE is growing has slowed down. Why could this be happening? Well, let’s take a look at what’s going on with margins and if the whole industry is feeling the heat.

NasdaqGS:LOPE Income Statement, November 5th 2019

In terms of returns from investment, Grand Canyon Education has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 11% exceeds the US Consumer Services industry of 4.8%, indicating Grand Canyon Education has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Grand Canyon Education’s debt level, has declined over the past 3 years from 29% to 16%.

What does this mean?

Grand Canyon Education's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Grand Canyon Education has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Grand Canyon Education to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for LOPE’s future growth? Take a look at our free research report of analyst consensus for LOPE’s outlook.
  2. Financial Health: Are LOPE’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2019. This may not be consistent with full year annual report figures.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.