Skip to Content
Stock Strategist Industry Reports

Who Is Capitalizing on Increased Demand for Education?

For-Profit education companies steal market share from traditional schools.

Mentioned: , , ,

Publicly traded for-profit education companies have seen rapid growth recently. This has helped them take market share away from traditional schools. While we expect growth to eventually slow, we still think the long term secular trends are promising for the for-profit sector.

Between 2005 and 2009, the average student populations of the 12 education companies we cover expanded by 352,000 students. This represents almost 23% of the 1.55 million student population growth estimated by the Department of Education (DoE) for that period. While this growth was impressive, recent trends have been even more substantial. The weak economy has encouraged more individuals to seek higher education as a means of finding new employment. This has driven the total student population at these 12 institutions to increase by 170,000 students compared to the average population of 2009, and there are still three quarters remaining in the year. Even more impressive is the fact that this increase is nearly double the DoE's median estimate, which predicts an increase of 89,000 students in 2010.

Todd Young does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.