Compass Point reiterated a Sell rating on Corinthian Colleges (NASDAQ: COCO) and cut its price target to $0.00 (from $0.50). The change reflects new liquidity and regulatory concerns.
Analyst Michael Tarkan said, "We are maintaining our Sell rating on COCO shares and are lowering our price target to $0, from $0.50, after the company announced that it had received a letter from the Department of Education (ED) notifying the company that it had been placed on Heightened Cash Monitoring 1 status and was subject to an additional restriction delaying the drawdown of Title IV funds. This action significantly impacts the company's already thin liquidity position and if the company cannot find alternative sources of financing, it may not be able to continue as a going concern. We note that management has engaged in discussions with its credit facility lenders in order to obtain financing, but the lenders have indicated they will not provide it. Beyond this new issue, the company remains subject to meaningful operational and regulatory risk associated with ongoing SEC, CFPB, and state AG investigations."