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ED Approves Capella's FlexPath Programs

Zacks Equity Research

Capella Education Company (CPLA) recently received approval from the U.S. Department of Education (ED) for its two FlexPath programs - Bachelor of Science in Business and Master of Business Administration, which will enable its students to access federal financial aid.

Capella had already received approval from the Higher Learning Commission (:HLC) in May 2013.

The format followed under the FlexPath programs reduces the cost and duration of the course. It also tailors programs according to the requirements of the job market. Under the FlexPath model, the assessment of a program is based on the achievement of the required competencies and application of learning rather than on time span.  

The FlexPath programs cater to working adults who prefer to upgrade their skills while maintaining their employment. The recent approval of the FlexPath programs is likely to contribute to new enrollment growth in the upcoming quarters.  

Capella recently reported second quarter 2013 earnings results. Capella’s second quarter 2013 earnings of 83 cents a share surpassed the Zacks Consensus Estimate of 66 cents by 25.8% on the back of better-than-expected new enrollment and total enrollment in the quarter. However, earnings declined 2.4% from the year-ago quarter due to year-over-year decreases in revenues and margins.

Capella carries a Zacks Rank #1 (Strong Buy).

Other education companies that are performing well are ATA Inc. (ATAI), Grand Canyon Education, Inc. (LOPE) and TAL Education Group (XRS).  ATA carries a Zacks Rank #1 (Strong Buy), while Grand Canyon and TAL Education carry a Zacks Rank #2 (Buy).

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