Covista Q4 Earnings & Revenues Top Estimates, Enrollments Up Y/Y

CVSA stock inched up 0.8% during yesterday’s after-hours trading session.

Covista’s Q4 Highlights

Adjusted earnings were $2.09 per share, up 25.9% year over year and 10% above the Zacks Consensus Estimate of $1.90.

Revenues increased 9.7% to $501.4 million year over year and beat the consensus mark of $485 million by 3.4%.

Adjusted EBITDA rose 15.2% year over year to $126.9 million, while adjusted EBITDA margin expanded 120 basis points to 25.3%. Management attributed the improvement to revenue growth and operational efficiencies, partly offset by elevated investment in strategic growth initiatives.

Adjusted operating income increased 15.3% to $100.9 million, and adjusted operating margin improved to 20.1% from 19.1%. Adjusted net income rose to $72.8 million from $62.4 million.

CVSA’s Segment Revenues Show Broad-Based Growth

Chamberlain revenues rose 3.2% to $190.2 million. Segment adjusted EBITDA increased 3.8% year over year to $46.8 million. Chamberlain students increased 1.6% to 39,501, the segment's second straight quarter of positive total enrollment growth. Its pre-licensure BSN program posted a 16th straight quarter of year-over-year enrollment growth, while management cited targeted operational enhancements as supporting new enrollment and future trends.

Walden University’s revenues increased 15.7% to $210.8 million as healthcare and non-healthcare programs supported growth. Adjusted EBITDA of the segment grew 32.3% to $69.7 million compared with the year-ago quarter. Walden University enrollment rose 14% to 54,851, its 12th straight quarter of year-over-year growth and highest growth rate of fiscal 2026.

Medical and Veterinary revenues advanced 10.7% to $100.3 million. Segment adjusted EBITDA increased year over year by 12.3% to $22.5 million. Enrollment increased 7.3% to 5,120, with growth led by Medical and new-enrollment acceleration at both Medical and Veterinary.

CVSA’s Fiscal 2026 Highlights

During the full fiscal year, revenues of $1.95 billion grew 9.3% year over year.

Adjusted EBITDA was up 13.5% to $521.7 million from $459.7 million reported in fiscal 2025. Adjusted EBITDA margin expanded year over year to 26.7% from 25.7%.

Adjusted EPS was $8.25, up year over year by 23.7% from $6.67 reported in fiscal 2025.

Covista Expands Programs and Employer Partnerships

Chamberlain and Advocate Health launched a nursing collaboration combining scholarships, clinical immersion, employment pathways and loan repayment support. Chamberlain also plans new campuses in Cincinnati and Salt Lake City, with classes expected to begin in the first half of fiscal 2027.

Walden programs launched heading into the 2026 academic year enrolled more than 1,700 students, and four additional programs began enrolling after quarter-end. Covista also added nine AI professional certificates with Google Cloud during Q4; more than 9,000 learners have enrolled across its 12 available AI credentials. These initiatives align with Purpose at Scale, which emphasizes operational excellence, platform extension, employer integration and technology.

CVSA Cash Flow Supports Buybacks and Balance Sheet

Fiscal 2026 free cash flow rose 38.7% to $393.1 million. Net cash provided by operating activities from continuing operations increased to $470.8 million from $333.7 million, while capital expenditures rose to $77.7 million from $50.3 million. Covista ended June with $406.3 million in cash and cash equivalents and net leverage of 0.5x.

The company repurchased $238 million of shares in fiscal 2026, leaving $661.8 million under its $750 million authorization. It also repaid $50 million of Term Loan B debt and refinanced outstanding debt while increasing revolving credit capacity.

Covista Sets Fiscal 2027 Growth Outlook

For fiscal 2027, Covista expects revenues of $2.05-$2.09 billion, representing roughly 5-7% growth. Adjusted earnings are projected at $8.90-$9.15 per share, implying about 8-11% growth year over year.

Management expects revenue growth to be stronger in the second half than in the first half due to Walden shifting one academic week from the second quarter into the third quarter. It also targets 0-50 basis points of adjusted EBITDA margin expansion, with the capital expenditure run rate slightly above annualized fourth-quarter fiscal 2026 spending and continued strong cash flow.

CVSA Stock’s Zacks Rank & Key School Picks

Covista currently carries a Zacks Rank #3 (Hold). 

TAL Education Group TAL presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The company has a trailing four-quarter earnings surprise of 210%, on average. The Zacks Consensus Estimate for TAL Education’s fiscal 2027 sales indicates growth of 22.3% while EPS reflects a decline of 14.1% from the year-ago period’s levels.

American Public Education, Inc. APEI currently carries a Zacks Rank #2 (Buy). The company has a trailing four-quarter earnings surprise of 157.7%, on average. 

The Zacks Consensus Estimate for American Public’s 2026 sales and EPS indicates growth of 90.4% and 6.5%, respectively, from the year-ago period’s levels.

A School Stock Poised to Beat Earnings

The combination of a positive Earnings ESP and a Zacks Rank of 1, 2 or 3 increases the odds of an earnings beat.

Strategic Education, Inc. STRA currently has an Earnings ESP of +2.38% and a Zacks Rank of 3.

Strategic Education’s earnings beat estimates in two of the last four quarters and missed on the remaining two occasions, the average surprise being 9%. The company’s earnings for the third quarter of 2026 are expected to grow 16.6% year over year.

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