Does Zovio Inc (ZVO) offer a good opportunity for investors?

Zovio Inc (NASDAQ: ZVO) stock fell -2.45% on Friday to $0.35 against a previous-day closing price of $0.35. With 1.4 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.6 million shares. During the session, the Education & Training Services company that operates in wider Consumer Defensive sector, reached to the highest price of $0.3628 whereas the lowest price it dropped to was $0.3401. The 52-week range on ZVO shows that it touched its highest point at $2.78 and its lowest point at $0.35 during that stretch. It currently has a 1-year price target of $5.00. Beta for the stock currently stands at 0.87.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of ZVO was down-trending over the past week, with a drop of -19.32%, but this was down by -62.37% over a month. Three-month performance dropped to -51.92% while six-month performance fell -71.15%. The stock lost -86.32% in the past year, while it has lost -72.74% so far this year. A look at the trailing 12-month EPS for ZVO yields -1.22 with Next year EPS estimates of -0.03. For the next quarter, that number is -0.28. This implies an EPS growth rate of 16.90% for this year and 88.90% for next year. EPS is expected to grow by 20.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -12.20%.

Float and Shares Shorts:

At present, 33.56 million ZVO shares are outstanding with a float of 31.75 million shares on hand for trading. On Jul 14, 2022, short shares totaled 0.22 million, which was 0.63% higher than short shares on Jun 14, 2022. In addition to Mr. Randy J. Hendricks as the firm’s CEO & Director, Mr. Kevin S. Royal serves as its CFO & Exec. VP.

Institutional Ownership:

Through their ownership of 55.09% of ZVO’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 6.63% of ZVO, in contrast to 27.12% held by mutual funds. Shares owned by individuals account for 21.59%. As the largest shareholder in ZVO with 7.67% of the stake, Nantahala Capital Management LLC holds 2,613,763 shares worth 2,613,763. A second-largest stockholder of ZVO, Royce & Associates LP, holds 2,567,476 shares, controlling over 7.53% of the firm’s shares. Heartland Advisors, Inc. is the third largest shareholder in ZVO, holding 1,866,802 shares or 5.48% stake. With a 4.83% stake in ZVO, the Royce Small-Cap Opportunity Fund is the largest stakeholder. A total of 1,647,688 shares are owned by the mutual fund manager. The Heartland Group Inc. – Value Fund, which owns about 3.59% of ZVO stock, is the second-largest Mutual Fund holder. It holds 1,225,000 shares valued at 1.19 million. Vanguard Total Stock Market Index holds 3.39% of the stake in ZVO, owning 1,156,564 shares worth 1.12 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2022, ZVO reported revenue of $51.38M and operating income of -$10.64M. Over the past year, revenue came in at $230.00M while operating income stood at -$36.85M. It generated -$4.67M net income for the quarter, which came to -$40.93M over the last twelve months. The EBITDA in the recently reported quarter was -$18.57M and diluted EPS was -$0.14. EBITDA for the full year was -$47.88M.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for ZVO since 1 analysts follow the stock currently. There are 1 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 0 believe that the stock is worth HOLDING, 0 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With ZVO analysts setting a high price target of $5.00 and a low target of $5.00, the average target price over the next 12 months is $5.00. Based on these targets, ZVO could surge 1328.57% to reach the target high and rise by 1328.57% to reach the target low. Reaching the average price target will result in a growth of 1328.57% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. ZVO will report FY 2022 earnings on 02/22/2023. Analysts have provided yearly estimates in a range of -$0.27 being high and -$0.27 being low. For ZVO, this leads to a yearly average estimate of -$0.27. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Zovio Inc reported -$0.36 EPS. Based on analyst estimates, the high estimate for the next quarter is -$0.28 and the low estimate is -$0.28. The average estimate for the next quarter is thus -$0.28.

Summary of Insider Activity:

Insiders traded ZVO stock several times over the past three months with 4 Buys and 1 Sells. In these transactions, 69,835 shares were bought while 3,465 shares were sold. The number of buy transactions has increased to 25 while that of sell transactions has risen to 10 over the past year. The total number of shares bought during that period was 457,424 while 77,717 shares were sold.

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