Why Education Management is Poised to Plunge

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, for-profit educator Education Management (NASDAQOTH: EDMC  ) has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Education Management, and see what CAPS investors are saying about the stock right now.

Education Management facts

   

Headquarters (founded)

Pittsburgh, Pa. (1962)

Market Cap

$691.0 million

Industry

Education services

Trailing-12-Month Revenue

$2.7 billion

Management

CEO Edward West (since 2012)

Acting CFO Randall Killeen (since 2012)

Return on Capital (average, past 3 years)

7.9%

Cash/Debt

$212.0 million / $1.5 billion

Competitors

Apollo Group (NASDAQ: APOL  )

Career Education (NASDAQ: CECO  )

Laureate Education

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 44% of the 59 members who have rated Education Management believe the stock will underperform the S&P 500 going forward.

Just yesterday, one of those Fools, All-Star Chemdawg, succinctly summed up the Education Management bear case for our community:

[A]n education doesn't mean much in this job market. The huge amount of Student loan debt already present in this country will be the next huge bailout needed. Any industry that requires help from the government going forward is facing significant headwinds. This stock has almost doubled in the past few months for no real reason ... I think this one takes a step back toward the 3 dollar range.

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