K12 (NYSE: LRN) and Grand Canyon Education (NASDAQ:LOPE) are both consumer discretionary companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Analyst Recommendations

This is a summary of current recommendations for K12 and Grand Canyon Education, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
K12 0 0 2 0 3.00
Grand Canyon Education 0 0 4 0 3.00

K12 presently has a consensus price target of $18.50, indicating a potential upside of 5.29%. Grand Canyon Education has a consensus price target of $77.25, indicating a potential downside of 9.30%. Given K12’s higher possible upside, analysts clearly believe K12 is more favorable than Grand Canyon Education.

Profitability

This table compares K12 and Grand Canyon Education’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
K12 0.05% 3.18% 2.40%
Grand Canyon Education 18.77% 21.77% 15.47%

Valuation and Earnings

This table compares K12 and Grand Canyon Education’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
K12 $888.52 million 0.76 $35.91 million N/A N/A
Grand Canyon Education $921.61 million 4.37 $310.30 million $3.62 23.53

Grand Canyon Education has higher revenue and earnings than K12.

Volatility and Risk

K12 has a beta of -0.24, indicating that its stock price is 124% less volatile than the S&P 500. Comparatively, Grand Canyon Education has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500.

Institutional & Insider Ownership

79.5% of K12 shares are owned by institutional investors. Comparatively, 96.6% of Grand Canyon Education shares are owned by institutional investors. 18.3% of K12 shares are owned by company insiders. Comparatively, 3.0% of Grand Canyon Education shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Grand Canyon Education beats K12 on 9 of the 12 factors compared between the two stocks.

K12 Company Profile

K12 Inc. (K12) is a technology-based education company. The Company offers curriculum, software systems and educational services designed to facilitate individualized learning for students in kindergarten through 12th grade (K-12). It provides a continuum of technology-based educational products and solutions to public school districts, public schools, virtual charter schools, private schools and families. The Company offers a set of products and services primarily to three lines of business, which include Managed Public School Programs, which consists of virtual and blended schools; Institutional business, which includes educational products and services sold to school districts, public schools and other educational institutions, and Private Pay Schools and Other, which includes private schools, including international, for which it charges student tuition and direct consumer sales. It sells individual online courses and supplemental educational products directly to families.

Grand Canyon Education Company Profile

Grand Canyon Education, Inc. is engaged in the provision of postsecondary education. The Company is a regionally accredited university. The Company offers the degrees, including Doctor of Education, Doctor of Business Administration, Doctor of Nursing Practice, Doctor of Philosophy, Education Specialist, Master of Divinity, Master of Arts, Master of Education, Master of Business Administration and Master of Public Administration, Master of Public Health, Master of Science, Bachelor of Arts, Bachelor of Science, and a range of programs for its degrees. It also offers certificate programs, which consist of a series of courses focused on a particular area of study for both the post-baccalaureate and post-graduate students. The Company offers its ground-based programs to students through three 15-week semesters in a calendar year and to online students in courses that generally range from 5 to 16 weeks throughout the calendar year.

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