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					                          North America United States
 Company

                          Industrials Business Services & Education



                          02 Feb 2010 - 09:34:07 PM
Global Markets Research




                          COMPANY ALERT                                                                                    Results
                          Corinthian Colleges Inc                                                                          Buy
                          Nice beat and raise; upside from persistence & low bad                                           Reuters:COCO.OQ Exchange:NSM Ticker:COCO

                          debt
                          Price (USD)                                 14.34    FY10 Guidance raised, we'll have to wait for call on CDRs/IBR
                                                                               COCO raised FY2010 guidance for revs/EPS from $1.62-$1.64bn/$1.55-
                          Price target                                27.00
                                                                               $1.60 to $1.63-$1.65bn /$1.60-$1.65, excluding Heald, vs DB $1.71bn/$1.60
                          52-week range                        21.47 - 13.13   and Street $1.65bn/$1.59. Including the acquisition, full year 2010 EPS guid-
                          Market cap (USDm)                          1,275.3   ance is for $1.63-1.68 on revenues in the range of $1.74-1.76bn. New
                          Shares outstanding (m)                        88.9
                                                                               student growth (organic) is still in the expected 11-13% range. There were
                                                                               no comments on CDRs (released industry wide on Monday) or the potential
                          Free float (%)                                100    positive impact from income based repayment (IBR).
                          Volume (1 Feb 2010)                      1,153,055

                          S&P 500 INDEX                             1,089.19
                                                                               2Q10 EPS beat, strong FCF, 3Q guidance above DBe/consensus
                                                                               Fiscal 2Q Rev/EPS of $414.3m/$0.44 versus DBe at $417m/$0.43 and the
                          FYE 6/30           2009A       2010E        2011E    Street at $405m/$0.40. EBIT margin was 15.6% versus DBe at 15.4%
                          1Q EPS               0.06       0.37A         0.48   (+695bp). Bad debt at 5.8% of revs was below guidance of 6.7-7.1% and
                                                                               down QoQ from 6.4% and YoY from 8.7%. FCF was approx $30m vs DBe
                          2Q EPS               0.17        0.43         0.55
                                                                               ($11m) and +$40m last year. For 3Q, guidance is for revs of $417 - $427m
                          3Q EPS               0.28        0.44         0.59   ($470-480m including Heald) on start growth of 6% - 8% and EPS of $0.44
                          4Q EPS               0.31        0.36         0.44   - $0.46 ($0.45-0.47 including Heald) vs DBe at $430m revs/ $0.44 EPS and
                          FY EPS               0.82        1.60         2.06
                                                                               +10% starts and Street $432m/$0.44.
                          (USD)

                          P/E (x)              19.4          9.0         7.0
                                                                               Strong enrollment, better-than-expected persistence
                          * Includes the impact of FAS123R requiring the ex-
                                                                               Total enrollment was 93.152K (+22%) vs DBe at 91.7K (+20%) and con-
                          pensing of stock options.
                                                                               sensus at 92.9K (+22%). Starts of 29.156K (+10.7%) topped our 29.0K
                                                                               (+10%) estimate but was below the Street's 29.7K (+13%). Student per-
                                                                               sistence of 68.5% was 140bps above our 67.1% estimate and increased by
                                                                               135bps YoY.


                                                                               Call today at 12pm EST. Dial-in: 866.383.7998, Pwd: 55003751.




                                                                               Paul Ginocchio, CFA     Adrienne Colby
                                                                               Research Analyst        Associate Analyst
                                                                               (+1) 415 617-4207       ( ) 212 250-0948
                                                                               paul.ginocchio@db.com   adrienne.colby@db.com
                          Deutsche Bank Securities Inc.
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                          GM.DB.COM MICA(P) 106/05/2009

				
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