DeVry Inc. (DV), along with other vocational schools, is well-positioned in both the U.S. and overseas markets in terms of the long-term competitive dynamic, in addition to students realizing a better return on investment with vocational programs, says Peter A. Appert, Managing Director and Senior Research Anayst at Piper Jaffray & Co.
“The vocational schools are competitively better positioned going forward than those operating in the degree completion market, because the competitive dynamic is different. If I want to train to become an auto mechanic, which is a highly skilled job that pays pretty well, the return on investment from pursuing a program…can be quite compelling, and there is not a ton of competition. The not-for-profit institutions don’t compete as actively in some of the vocational markets,” Appert said.
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DeVry has been actively expanding its international presence, especially in Brazil, where the competitive dynamic is more attractive, with stronger demand due to the lack of alternatives for prospective students, Appert said.
“For many international economies to sustain growth, for second-world economies to become first-world economies, you need a more educated work force, you need higher college participation rates. So in Brazil, DeVry creates that opportunity, and there is very strong demand. They have high-quality programs. It’s a very large, underserved market historically, with limited capacity, limited competition; a great opportunity given macroeconomic conditions and secular growth in the economy to ride the wave of increased college participation rates. The execution has been good, making Brazil a very attractive market for DeVry,” Appert said.
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