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Why Shares of Bridgepoint Education Inc. Tumbled

By Jeremy Bowman – Mar 11, 2014 at 5:26PM

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Bridgepoint Education Inc. (ZVO -7.14%) were getting sent to detention today, falling as much as 15% after missing bottom-line estimates in its fourth-quarter earnings report. 

So what: The for-profit educator posted a loss of $0.12 per share against estimates of a penny per-share profit, while revenues increased 21.9% to $163.5 million, beating the consensus at $156.7 million. Overall student enrollment fell 22% to 63,624, but new student enrollment, seen as a key industry indicator, improved 10% to 10,200, showing that Bridgepoint's slide may only be temporary. In a brief and innocuous statement, CEO Andrew Clark simply said, "We are pleased with positive response we have attracted from prospective students, and plan to continue this focus in 2014 and beyond." 

Now what: Bridgepoint did not provide any guidance, but the uptick in new student enrollment seems to bode well for the company. Still, analysts see profits slimming this year following a sharp decline in 2013. After a tough couple of years, education stocks seem to be hitting bottom and are seeing revenue slides flatten, but with the exodus of 22% of its students, Bridgepoint may be behind the curve in this regard. Keep your eye on new student enrollment figures going forward, as that should ultimately tell where the company's headed. 

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Bridgepoint Education. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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