Vocational education company Covista (NYSE: CVSA) reported Q1 CY2026 results topping the market’s revenue expectations, with sales up 4.5% year on year to $487 million. The company’s full-year revenue guidance of $1.94 billion at the midpoint came in 0.8% above analysts’ estimates. Its non-GAAP profit of $1.98 per share was 14.9% above analysts’ consensus estimates.
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Covista (CVSA) Q1 CY2026 Highlights:
- Revenue: $487 million vs analyst estimates of $474 million (4.5% year-on-year growth, 2.7% beat)
- Adjusted EPS: $1.98 vs analyst estimates of $1.72 (14.9% beat)
- Adjusted EBITDA: $127.9 million vs analyst estimates of $117.7 million (26.3% margin, 8.6% beat)
- The company slightly lifted its revenue guidance for the full year to $1.94 billion at the midpoint from $1.92 billion
- Management raised its full-year Adjusted EPS guidance to $8.05 at the midpoint, a 1.9% increase
- Operating Margin: 18.8%, in line with the same quarter last year
- Free Cash Flow Margin: 69.1%, up from 42.4% in the same quarter last year
- Market Capitalization: $3.98 billion
Company Overview
Formerly known as DeVry Education Group, Covista (NYSE: CVSA) is a global provider of workforce solutions and educational services.
Revenue Growth
A company’s long-term sales performance is one signal of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Covista grew its sales at a 15.2% compounded annual growth rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the consumer discretionary sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Covista’s recent performance shows its demand has slowed as its annualized revenue growth of 11.4% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs. 
This quarter, Covista reported modest year-on-year revenue growth of 4.5% but beat Wall Street’s estimates by 2.7%.
Looking ahead, sell-side analysts expect revenue to grow 5.5% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will see some demand headwinds.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Covista’s operating margin has generally stayed the same over the last 12 months, and we generally like to see margin increases due to economies of scale and cost efficiency over time.
This quarter, Covista generated an operating margin profit margin of 18.8%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Covista’s EPS grew at 22.4% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 15.2% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.
In Q1, Covista reported adjusted EPS of $1.98, up from $1.92 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Covista’s full-year EPS of $7.82 to grow 7.4%.
Key Takeaways from Covista’s Q1 Results
We were impressed by how significantly Covista blew past analysts’ adjusted operating income expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 2.6% to $119.99 immediately following the results.
Sure, Covista had a solid quarter, but if we look at the bigger picture, is this stock a buy? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
