Conventional wisdom states that even in brutal economic times, people still need to go to school to party ... or, uh ... to learn new skills. With unemployment levels hanging out at stratospheric altitudes, it's only natural to think that educational services companies like Princeton Review (Nasdaq: REVU) would be raking in the money from the recession's victims, who are looking to secure their futures through higher education. Yet, while the broader stock market has recovered, Princeton Review's stock price continues its plunge into the deep abyss. What gives?

Educational service providers such as DeVry (NYSE: DV), ITT Educational Services (NYSE: ESI), and Apollo Group (Nasdaq: APOL) have seen their stock prices at least stabilize, if not retake their pre-recession highs. Although not a direct competitor, Princeton Review continues to bleed its shareholders' investment dry despite operating in the same industry. So blaming the industry's economics seems like a dubious excuse for the stock's performance.

While the "Review" has never been a consistently profitable company -- in fact, it has only been profitable once in the last 10 years -- it has typically been able to increase its revenue each year. While 2008 took a bite out of the company's revenue, 2009 revenue nearly matched 2007 levels. That's nothing that will get investors pumped up, but it's not terrible either.

The bigger issue for Princeton Review is its recent purchase of online learning and education company Penn Foster. While the acquisition may prove to benefit the Review in the long run, it leaves the company with very little cash relative to its current bills. Because Princeton Review was never a cash cow, nearly all of the $170 million purchase price of Penn Foster had to be financed through a consortium of lenders. The deal left Princeton Review so cash-strapped that it recently had to issue more shares of its common stock in anticipation of repaying its lenders.

So, while other education-based companies have been able to weather the economic storm, Princeton Review's shareholders are still in the midst of it. The purchase of Penn Foster will likely remain a drag on the Review's stock price for the foreseeable future, so don't expect it to produce a solid report card (aka, earnings announcement) that will excite the market anytime soon.

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