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During the IPO season Francis Gaskins, editor of IPOdesktop.com, regularly appears on CNBC TV, Bloomberg, thestreet.com & other financial cable channels. On the day of the Visa IPO he appeared on four cable TV financial shows including Bloomberg & CNBC. Over the past five years he has... More
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  • Rosetta Stone's IPO (RST) is better than Bridgepoint Education's IPO (BPI) 0 comments
    Apr 14, 2009 12:30 PM | about stocks: RST, BPI, APEI, APOL, BBBB, CECO, COCO, CPLA, DV, EDU, ESI, LINC, LOPE, REVU, STRA, SYMC

    (RST) & (BPI) both scheduled for April 13wk

    SIMILARITIES
    (1) Both are educational stocks
    . Rosetta Stone provides language learning software
    . Bridgepoint Ed provides post-secondary online education

    (2) Both report revenues for 2008 in the $200mm range & both were profitable in 2008

    (3) Both have good internal growth track records

    (4) The trailing 12 mos P/E ratios are in the same range at price range mid-points:  23.4x for Rosetta; 29.7x for Bridgepoint

    DIFFERENCES
    (1) Rosetta is a market segment leader with a differentiated product

    (2) 95% of Rosetta's sales are in the US, and growth plans are set for international expansion

    (3) Rosetta's gross margin is higher, 87% versus 71% for Bridgepoint

    (4) Price-to-book value is more favorable for Rosetta: 2.7 versus 20.8 for Bridgepoint

    (5) Online comparables to Bridgepoint suggest it is fairly priced (trailing 12 months) relative to Capella Education (CPLA) at 28x and Strayer Education (STRA) at 29x.  The range is wide, however, with Apollo (APOL) at 15x ($10bb market cap) and Grand Canyon (LOPE) at 93x ($677mm market cap).

    Notice that post-secondary online ed stocks sold off 15-17% since March 31, so there are some headwinds in the sector.

    Read more
    Rosetta Stone IPO:  http://bit.ly/18evtp
    Bridgepoint Ed IPO:  http://bit.ly/4DhEsY
    Disclosure: No positions

     

    Themes: IPO Analysis, Rosetta Stone, Bridgepoint Education Stocks: RST, BPI, APEI, APOL, BBBB, CECO, COCO, CPLA, DV, EDU, ESI, LINC, LOPE, REVU, STRA, SYMC
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