Education Management (NYSE: LRN) and K12 (NYSE:LRN) are both small-cap consumer discretionary companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Education Management and K12, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Education Management 0 0 0 0 N/A
K12 0 0 2 0 3.00

K12 has a consensus price target of $20.50, suggesting a potential upside of 21.52%. Given K12’s higher probable upside, analysts clearly believe K12 is more favorable than Education Management.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Education Management N/A N/A N/A N/A N/A
K12 $917.73 million 0.73 $27.62 million $0.68 24.81

K12 has higher revenue and earnings than Education Management.

Risk & Volatility

Education Management has a beta of 0.17, meaning that its share price is 83% less volatile than the S&P 500. Comparatively, K12 has a beta of -0.09, meaning that its share price is 109% less volatile than the S&P 500.

Institutional & Insider Ownership

0.0% of Education Management shares are held by institutional investors. Comparatively, 82.7% of K12 shares are held by institutional investors. 81.2% of Education Management shares are held by company insiders. Comparatively, 18.3% of K12 shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Education Management N/A N/A N/A
K12 3.01% 4.72% 3.67%

Summary

K12 beats Education Management on 7 of the 9 factors compared between the two stocks.

Education Management Company Profile

Education Management Corporation provides post-secondary education in North America. It offers academic programs to students through campus-based and online instruction to earn undergraduate and graduate degrees, and various specialized non-degree diplomas in a range of disciplines comprising business, culinary, design, education, fashion, health sciences, information technology, legal, media arts, and psychology and behavioral sciences. The company was founded in 1962 and is headquartered in Pittsburgh, Pennsylvania.

K12 Company Profile

K12 Inc., a technology-based education company, together with its subsidiaries, provides online curriculum, software systems, and educational services to facilitate individualized learning for students primarily in kindergarten through 12th grade in the United States and internationally. The company also offers curriculum and technology solutions for full-time virtual and blended programs; full-time virtual programs, semester courses, and supplemental educational products; teacher training, teaching, and other academic and technology support services to public schools, school districts, private schools, charter schools, early childhood learning centers, and corporate partners. In addition, it provides FuelEd suite of offerings, such as K12 curriculum, FuelEd online courses, and FuelEd anywhere learning systems; Middlebury interactive languages; Stride; and the Big Universe literacy solution. Further, the company operates online private schools, including The K12 International Academy, the George Washington University Online High School, and the Keystone School. Additionally, it provides access to the online lessons and curriculum through proprietary learning management system; learning kits; student computers; and management, technology, and educational services. The company sells individual K-8 online courses and supplemental educational products directly to families. K12 Inc. was founded in 2000 and is headquartered in Herndon, Virginia.

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