What happened

Grand Canyon Education (LOPE -0.50%) stock gained 24.5% in February, according to data from S&P Global Market Intelligence.

The share price of the education-services company jumped following the release of fourth-quarter earnings that beat the market's expectations, along with encouraging guidance.

LOPE Chart

LOPE data by YCharts.

Grand Canyon Education reported earnings on Feb. 20, and the company's earnings per share of $1.56 per share handily beat the average analyst estimate's call for per-share earnings of $1.42. The company's fourth-quarter net revenue actually fell nearly 35% compared to the prior-year period, but the drop-off is misleading.

Check out the latest earnings call transcript for Grand Canyon Education.

So what

As noted by my Motley Fool colleague Brian Stoffel, Grand Canyon Education's earnings reports can be difficult to parse. After splitting from Grand Canyon University (GCU) last year, Grand Canyon Education is now just a services provider for its former school in Phoenix, Arizona.

The timing of the split and restructuring makes for some difficult comparisons, but explains why the company's revenue dropped from $271.4 million in the fourth quarter of 2017 to $177.5 million in Q4 2018.

Grand Canyon Education provides tech, marketing, and financial-aid processing services for GCU, and the university is currently the education services company's only customer. This means that Grand Canyon Education's performance still hinges on performance at Grand Canyon University. Adjusting for the discrepancy, Grand Canyon Education reports that services sales actually climbed 9% year over year in the quarter. End-of-period enrollment at GCU increased 7.8% year over year, helping to spur Grand Canyon Education's adjusted services revenue growth. Operating income climbed 16% and earnings per share rose 11% compared to the prior-year period.

GCU has switched from a for-profit college to a private nonprofit, and the services company is also free to pursue other partners. It's already branching out with its $365.8 million cash acquisition of Orbis Education -- an online company that offers accelerated degrees and courses in nursing and other healthcare fields.

Grand Canyon Education's logo

Image source: Grand Canyon Education.

Now what

Grand Canyon Education should have new opportunities to expand its partnerships and service offerings following its acquisition of Orbis. It's also looking at new partner schools, but making sure that they're the right fit and they don't threaten GCU. The company expects to deliver earnings per share of $5.10 on revenue of $775.5 million in 2019. The stock trades at roughly 22.5 times this year's expected earnings.