The Friday Morning Watchlist: The Ed-Tech Buzz List ( $LRN, $GAXY, $AGTE, $CECO)
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K12 Inc. (NYSE:LRN) recently announced that students and teachers at Nevada Virtual Academy (NVVA) will begin the 2019-2020 school year on August 12, simply by turning on their computers. A full-time, accredited, online public charter school, NVVA provides a tuition-free public education for students in grades 6-12 across the state, and offers access to LRN’s curriculum.

“At NVVA, our goal is to help each student unlock their potential,” said English teacher Marie Wiley. “Starting on the very first day of school, we work to make a personal connection with students and their families to discover what excites them about learning, so they can succeed in the virtual classroom and wherever they want to go next.”

K12 Inc. (NYSE:LRN) trumpets itself as a technology-based education company that, 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.

K12 Inc. (NYSE:LRN) generated sales of $253.3M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -0.6% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($234M against $148.8M).

 

Galaxy Next Generation Inc. (OTC:GAXY) is a provider of interactive learning technology solutions that allows the presenter and participant to engage in a fully collaborative instructional environment.

The company just the signing of a letter of intent to acquire a west coast based audio company focused on creating innovative products that provide fundamental tools used for building notification systems.

According to the release, the proposed acquisition is for a combination of cash and stock. The target company generated approximately $4 million in revenue through the twelve month period ending June 30, 2019. The targets products and services allow institutions access to intercom, scheduling and notification systems they use every day with improved ease of use. It provides an open architecture solution which allows its products to be used in many existing and new environments. Intercom, PA, Bell and control solutions are easily added and integrated with its first to market open architecture design and current software model. Its products combine elements not normally found together over a common IP network, which minimizes infrastructure requirements and reduces costs by combining systems. This strategy also places it at the forefront of school safety and communication.

Gary LeCroy, Galaxys Chief Executive Officer, commented, We are excited to add innovative audio technology to our product suite, as it is something that our end customers, especially in the K-12 market segment have been demanding. This is evident by their strong revenue growth in the first half of 2019. We believe this is the first company to provide an open architecture solution that allows existing components to be used and to look beyond the space of intercom to extend capabilities of the system for other applications. The proposed acquisition also has 4 patents pending and expands our geographical footprint to the west coast. We are looking forward to advancing this transaction to the definitive stage and expect to close by the end of September.

Galaxy does not control where resellers focus their resell efforts, although generally, the K-12 education market is the largest customer base for Galaxy products – comprising nearly 90% of Galaxy’s sales.

The company boasts a strong team, including its COO, who spent the majority of her young career at Mimio/Boxlight (NASDAQ:BOXL), a leader in the ed-tech and interactive display market. She performed many jobs at Mimio including, sales, federal programs director, and regional management.

With a tiny float of just 1.5 million shares, GAXY is sitting in a strong pattern with a recent hold of a key trendline and a number of clear support levels. That may demonstrate strong accumulation present under the surface of the tape.

Several indicators agree with the strong upside potential here. This is the most speculative idea in this list of compelling ed-tech stories, but it may also have the most upside room to run as a result.

 

Adtalem Global Education Inc (NYSE:ATGE) provides educational services worldwide. The company has been building out its brain trust, just announcing that its board of directors has unanimously elected Lisa W. Wardell, 49, as chairman of the board, effective July 16, 2019.

According to the release, Wardell, a director since 2008, will continue to serve as Adtalem’s president and chief executive officer, a role she has held since May 2016. The board unanimously elected William W. Burke, a director since January 2017, as lead independent director, also effective July 16, 2019. Burke, 60, will remain chairman of the audit and finance committee.

The company operates through three segments: Medical and Healthcare, Professional Education, and Technology and Business.

The Medical and Healthcare segment operates Chamberlain University, which provides a pre-licensure bachelor’s degree in nursing at 21 campus locations and post-licensure bachelor’s, master’s, and doctorate degree programs in nursing through its online platform; and operates medical and veterinary schools, including American University of the Caribbean School of Medicine, Ross University School of Medicine, and Ross University School of Veterinary Medicine.

The Professional Education segment operates an Association of Certified Anti-Money Laundering Specialists, which provides membership services, certified anti-money laundering specialist certification, conferences, risk assessment, training, and publications; and Becker Professional Education that prepares candidates for the Certified Public Accountant, Certified Management Accountant, and U.S. Medical Licensing Examination certification examinations, as well as professional education programs and seminars in accounting and finance. This segment also offers professional education in the areas of finance, accounting, analytics, marketing, and healthcare.

The Technology and Business segment operates approximately 15 institutions, which offers undergraduate and graduate programs in the areas of business, management, medical, healthcare, law, and engineering; and provides legal bar exam review courses. Adtalem Global Education Inc. has a strategic alliance with Northeastern University’s D’Amore-McKim School of Business.

The stock has been on a rampage over the last few days after posting a stronger-than-expected quarter. Shares are now testing resistance at the 200-day MA.

 

Career Education Corp. (NASDAQ:CECO) promulgates itself as a company that operates colleges, institutions, and universities that provide education to student population in various career-oriented disciplines through online, campus based, and blended learning programs in the United States.

The company just announced Q2 earnings showing a 10.1% jump in revenues. The company’s University Group saw total student enrollments grow at 5.4%

It operates through three segments: Colorado Technical University, American InterContinental University, and All Other Campuses. The company offers doctoral, master’s, bachelor’s, and associate degrees, as well as certificate programs. It also provides academic programs in the career-oriented disciplines of business studies, nursing, computer science, engineering, information systems and technologies, cybersecurity, criminal justice, and healthcare management; and educational programs in culinary arts, as well as patisserie and baking. As of December 31, 2018, the company had a total student enrollment of approximately 34,400 students.

If you’re long this stock, then you’re liking how the stock has responded to the announcement. CECO shares have been moving higher over the past week overall, pushing about 10% to the upside on above average trading volume.

Career Education Corp. (NASDAQ:CECO) pulled in sales of $157.9M in its last reported quarterly financials, representing top line growth of 6.6%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($239.9M against $92.6M).

 

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