Just a couple of years ago the for-profit education centers were truly living up to their names. They were schooling the market on rich stock gains as the country retooled the workforce in the grand pursuit of higher learning.
Yet that shiny apple on the teacher's desk has gotten a bit wormy of late. DeVry (NYSE:DV) has seen its profits slide so far this fiscal year. Corinthian Colleges (NASDAQ:COCO) saw its shares take a hit earlier this month when enrollment was growing slower than expected.
Last night Apollo Group (NASDAQ:APOL) eased the sector's worries by projecting meatier growth here in its new fiscal year than the market was expecting. Apollo is looking to earn $2.40 a share on a tight revenue range between $2.285 billion and $2.288 billion this year.
While the company is looking for enrollment to grow by just 12% to 13%, that's enough to earn the stock a passing grade with its stock climbing on the news. This should ultimately reflect well on the trading of other for-profit players such as Strayer (NASDAQ:STRA), ITT (NYSE:ESI), and Career Education (NASDAQ:CECO).
Yes, the buzz may be gone from this once-scorching sector. However, the story that drove many of these companies higher hasn't changed. Folks are still looking to "better deal" their educations, and in some cases, the Internet is proving to be a worthy bargain classroom.
So let the buzz move on. It was starting to get in the way of the apple.
Longtime Fool contributor Rick Munarriz is a firm believer in online education, if only so the teacher can't catch him snoring. He does not own shares in any of the companies mentioned in this story.
