Falling Earnings Estimates Signal Weakness Ahead for K12, Inc. (LRN) – Tale of the Tape

One such stock that you may want to consider dropping is K12, Inc. (LRN) which has witnessed a significant price decline in the past four weeks, and it has seen negative earnings estimate revisions for the current quarter and the current year. A Zacks Rank #4 (Sell) further confirms weakness in LRN.

A key reason for this move has been the negative trend in earnings estimate revisions. For the full year, we have seen 5 estimates moving down in the past 30 days, compared with no upward revisions. This trend has caused the consensus estimate to trend lower, going from $1.05 a share a month ago to its current level of 93 cents a share.

Also, for the current quarter, K12, Inc. has seen no estimate revisions on the either side. However, the consensus loss estimates have moved up to a loss of 10 cents from a loss of 4 cents over the past 30 days.

The stock also has seen some pretty dismal trading lately, as the share price has dropped 12.5% in the past month.

So it may not be a good decision to keep this stock in your portfolio anymore, at least if you don’t have a long time horizon to wait.

If you are still interested in the services sector, you may instead consider some better-ranked stocks including Capella Education Co. (CPLA) and GP Strategies Corp. (GPX) and Grand Canyon Education, Inc. (LOPE). All these stocks holds a Zacks Rank #2 (Buy) and may be better selections at this time.

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