On May 7, shares of Strayer Education (STRA 0.43%) jumped from an opening price of $42.74 to close at $51.87 after the company reported its first-quarter 2014 earnings that morning. This was over a 20% increase -- amazing for the year, much less for the day.

By contrast, its competitor, Grand Canyon Education, Inc. (LOPE 0.25%), announced its first-quarter 2014 earnings on the evening of April 30. On May 1, its stock went from an opening price of $44.01 to $45.99 at closing. This was a more modest jump of 8% for the day.

What is the Strayer difference that made its stock jump up proportionally higher than that of Grand Canyon? And more importantly, which one looks more promising in the long run?

The power of Strayer
Strayer's first-quarter 2014 numbers were not too impressive. Revenue for the quarter was $116.5 million, a 15% drop from the same period of last year. Student enrollment at Strayer University for the 2014 spring term fell 10% to just over 41,000 compared to the 2013 spring-term enrollment of over 46,000. Its bad-debt expense as a percentage of revenue rose 4.3% compared to the same period in 2013. During this time, Strayer finished the last of its twenty planned location closures. Why did Strayer's stock bounce up so high?

The answer here is that Strayer surpassed analysts' estimates. Strayer's earnings per share of $1.40 exceeded analysts' estimate of $1.29 in earnings per share by over 8%. Whether Strayer merits that much excitement because it exceeded expectations for this past quarter alone is debatable.

Don't get me wrong--Strayer has some positives. As noted before, it closed twenty underperforming locations and it expects annual savings of $50 million in operating expenses from this. Its Jack Welch Management Institute graduate program grew by 39% this year, compared to the year before. Strayer was able to grow its institutional alliances and national accounts (corporate partnerships), with new students from this segment up 19% from the prior year.

However, beyond the Jack Welch Management Institute, other units of Strayer have either been flat or declining. New students from institutional alliances and national accounts have not offset the overall decline in enrollments. Graduate enrollments outside of the Jack Welch Management Institute were flat. While Strayer has reduced its undergraduate tuition in order to become more affordable, that strategy has resulted in lower revenue per student, which is down 1.2% this year compared to the same time in 2013.

Isn't it grand?
In contrast, Grand Canyon's quarterly financials were promising. In its April 30 report of first-quarter 2014 results, Grand Canyon reported that its quarterly revenue grew 17.9% compared to the year-ago period to $167.4 million. Enrollment grew 15%  to over 61,000 compared to over 53,500 in the year-ago period. Ground enrollment grew the most as it was up 32.3% to over 9,600 students compared to 7,300 students in the year-ago period.

Grand Canyon is looking to expand its physical presence to accommodate the growing on-campus student body, completing two new dormitories and with plans to break ground on a new East Valley campus in July 2014. CEO Brian Mueller projects that there will be 17,000 on-campus students by 2016, with the two campuses having a total capacity for 28,000 students.

Furthermore, Grand Canyon is promoting its student-body academic and extracurricular activities, which attract potential students. The GPA of incoming new students is over 3.5. Of Grand Canyon's pre-med students, 75% get into graduate school, compared to the national average of 42%. Grand Canyon's music and theater department had five major productions and 200 total performances, in front of 125,000 patrons. In its first year in Division 1 as part of the Western Athletic Conference, Grand Canyon women won the indoor-track championship and its men finished second. Both its men's and women's basketball teams finished third.

Which is the way to go?
If you already hold shares in Strayer, consider its recent run-up in stock price an opportunity to sell. While Strayer has made restructuring moves to limit its losses, I don't see a strategy that would grow its enrollment significantly.

On the other hand, Grand Canyon is growing its enrollments (and revenues) and is building to handle expected growth. If you are looking to buy one of these two for-profit education stocks, Grand Canyon is the more attractive investment.