NEW YORK -- Higher One's stock declined more than 7 percent Thursday as Piper Jaffray cut its rating and price target for the college payment services company, saying its 2012 and 2013 forecasts are at risk due to challenging enrollment trends.
THE ANALYSIS: Analyst Michael Grondahl Grondahl said that Higher One had a difficult first half of 2012 because reduced Pell grant availability and funding constraints pressured college enrollment. If fewer people enroll at colleges because they can't obtain the funding or grants that they need, that gives Higher One fewer students to market its bank cards and checking accounts to.
The analyst believes these tough conditions have continued into the second half of the year, which puts Higher One's 2012 and 2013 outlooks at risk. He lowered his 2012 and 2013 adjusted earnings and revenue estimates.
Higher One Holdings Inc. markets bank cards and checking accounts to students through exclusive deals with colleges and universities.
SHARE ACTION: Shares fell 97 cents, or 7.5 percent, to $11.92 in afternoon trading. The stock has traded in a 52-week range of $9.59 to $20.48. For the year to date, the shares are down 31 percent.