Proposed Agreement with the University of Arizona Creates Meaningful Upside but Execution Will Be Key
|52 Week Range||$1.08-$7.24|
|Avg. Daily Vol. (30 day)||1,074,299|
|Shares Out (MM)||32.2|
|Market Cap (MM)||$109.10|
|Institutional Ownership %||65.65%|
|Short Int./% of Float||0.13 / 0.43%|
|Enterprise Value ($MM)||22.38071|
|Debt to Equity||NA|
|Revenue TTM (MM)||$400.1|
- Zovio is attempting to transform itself from a for-profit school with significant regulatory burden into an education technology leader.
- The announced transaction with the University of Arizona has the potential to create a win/win/win situation: a win for students, a win for the University of Arizona, and a win for Zovio.
- The cloud over the stock is attributable to mixed industry reputation, adverse political interests, and occasional excessive regulatory demands. This has impacted operations and valuation over the last few years, but this cloud could be lifted with the completion of the proposed transaction, which could lead to improved operational results and a more positive investor outlook.
- While renewed enrollment growth in the spun-off, non-profit university will be the key source of upside going forward, continued growth in the Fullstack Academy and TutorMe businesses, and potential service contract wins with other universities represent additional potential sources of upside.
Zovio currently owns and manages Ashford University, a for-profit university with about 35,000 registered students, mostly working adults. Zovio also operates a web development school (the Fullstack Academy) as well as an online tutoring service (TutorMe) matching tutors with students.
Zovio announced in early August that it would sell Ashford University to the University of Arizona who will rename the school the University of Arizona Global Campus. The new entity will receive meaningful services from Zovio and will pay Zovio for these services as well as provide Zovio with a substantial revenue share opportunity.
Zovio is attempting to transform itself from a for-profit school with significant regulatory burden into an education technology leader.
Water Tower Research (“WTR”) is a professional publisher of investment research reports on public companies and, to a lesser extent, private firms (“the Companies”). WTR provides investor-focused content and digital distribution strategies designed to help companies communicate with investors.
WTR is not a registered investment adviser or a broker/dealer nor does WTR provide investment banking services. WTR operates as an exempt investment adviser under the so called “publishers’ exemption” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940. WTR does not provide investment ratings / recommendations or price targets on the companies it reports on. Readers are advised that the research reports are published and provided solely for informational purposes and should not be construed as an offer to sell or the solicitation of an offer to buy securities or the rendering of investment advice. The information p...