Archipelago Learning: Education Stock With Continued Growth Potential, And Some Risks

| About: Archipelago Learning, (ARCL)

About the company

Archipelago Learning (NASDAQ:ARCL) is a subscription-based online education company that provides educational products to public and private schools.


The company was founded in 2000 under the name Study Island by two entrepreneurs, Cameron Chalmers, a computer scientist, and David Muzzo, an economist and marketer.

The first product that they developed was in Ohio because at that time, the state’s standards for reading and mathematics were being revised. It became an instant success as students improved their results while being engaged and having fun.

In early 2009, the company changed its name to Archipelago Learning and entered the postsecondary educational market.

Products and Services

The company’s products are offered through Study Island, Northstar Learning, and Education City. Study Island, a web-based educational program, is the company’s core product, and it is specifically designed to meet specific state standards. Northstar Learning is a product line that was launched to serve the postsecondary educational market. Similarly to Study Island, Education City’s program is built upon state educational requirements.


Since its inception in 2000, the company showed phenomenal growth. However, the growth is not over. The company plans to grow by expanding the number of schools it serves, increasing revenue per school, and going into new growth initiatives such as Northstar Learning and Education City.


  • The majority of the company’s customers are public schools that rely on government funding, which can be subject to reductions.
  • Educational standards are established at the state level and are at risk of being replaced with national standards, which could reduce demand for the company’s products.
  • The company’s products are purchased by individual schools, and district decision makers could easily discontinue their use in their schools.

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Tagged: , Education & Training Services
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