CVSA Education Services · Healthcare education · Workforce training · Thesis updated July 19, 2026

Healthcare shortages power Covista, regulation tests it

Covista trains nurses, doctors, veterinarians, and other health workers through five schools.
Walden remains the fastest grower, with Q3 FY26 enrollment up 12.3% to about 54,500 students.
Chamberlain has started to recover, with Q3 enrollment up 0.5% after a Q2 decline.
The biggest outside risk is federal education policy, especially student loan access after OBBBA.
The next proof points are Sallie Mae financing, fall Chamberlain demand, and 6 new campuses.

01 Running thesis

Shortage tailwind, policy overhang

Covista sits in a large labor problem. The U.S. needs more healthcare workers, and Covista runs schools that train them. That gives the company a real demand tailwind if students can pay, pass, and find jobs.

The bull case has improved. Walden is still compounding, with Q3 FY26 enrollment up 12.3% to about 54,500 students. Chamberlain also returned to positive enrollment growth in Q3, up 0.5% to 40,767 students, after weaker marketing and funnel conversion hurt Q2. Management raised full-year revenue and EPS guidance, which shows more confidence in the recovery.

The bear case is still serious. Covista is a proprietary school operator, which means it makes money from tuition and has long depended on federal student aid rules. The One Big Beautiful Bill Act changed federal loan access, including Grad PLUS and loan limits. Covista is working with Sallie Mae on alternative financing, but that fix still depends on a capital syndicate coming together.

Two open questions matter. Management has not shared the specific economics of the SSM Health partnership, so investors do not yet know how profitable that model can be. Capital spending is also expected to ramp in Q4, and management said that level may be a useful proxy for 2027 campus expansion.

May 2026▲Q3 FY26 strengthened the thesis. Chamberlain returned to positive enrollment growth, Walden stayed in double-digit growth, AI credentials gained more than 4,000 learners, and management raised full-year revenue and EPS guidance.

May 2026→The Q3 call added two open questions. Management did not give SSM Health partnership economics, and it said Q4 capital spending should ramp and may be a proxy for 2027.

Jan 2026▲Walden kept leading growth in Q2 FY26, with enrollment up 13.0% to 52,400 students. Chamberlain was weaker, down 1.0%, but management pointed to double-digit application growth as an early recovery signal.

Oct 2025▼Q1 FY26 exposed Chamberlain execution problems in local marketing and inquiry conversion. The issue raised near-term risk even as total company revenue rose 10.8%.

Aug 2025→The SSM Health partnership added a direct education-to-employment angle, while OBBBA added a new financing risk. Management said a Sallie Mae letter of intent was meant to reduce student disruption.

02 Business model

Tuition tied to healthcare jobs

Covista makes money by charging tuition for degree and certificate programs. Its main schools are Chamberlain University, Walden University, American University of the Caribbean School of Medicine, Ross University School of Medicine, and Ross University School of Veterinary Medicine.

The model works best when three things line up: student demand, available financing, and good career outcomes. Chamberlain is tied closely to nursing demand. Walden serves many working adults online. The medical and veterinary schools serve students seeking professional degrees.

Covista is also trying to connect schools directly to employers. The SSM Health partnership is an example. It is meant to fund education, add clinical experience, and create a hiring path. That could make Covista more useful to hospitals, but the profit details are still not public.

The model can break if students cannot finance tuition, if enrollment teams miss intake cycles, or if regulators tighten rules on aid, accreditation, or student outcomes. Those risks are not distant. Chamberlain already had a Q2 enrollment decline after marketing and conversion problems.

03 Product portfolio

Schools inside the platform

Steady

Chamberlain University

Chamberlain is the nursing and health professions engine. In Q3 FY26 it produced $197.0 million of revenue, up 2.3%, and enrollment returned to growth.

Growth engine

Walden University

Walden serves many working adults online across nursing, education, counseling, business, psychology, and social work. Q3 FY26 enrollment rose 12.3%, making it the clearest growth engine.

Steady

Medical schools, AUC and RUSM

American University of the Caribbean School of Medicine and Ross University School of Medicine train future doctors. They sit in the Medical and Veterinary segment, which grew Q3 revenue 8.9%.

Steady

Ross University School of Veterinary Medicine

RUSVM gives Covista exposure to veterinary education. It adds another professional degree path inside the same student financing and accreditation risk frame.

Option

AI credentials

Covista launched AI credentials across nursing, medicine, and foundational AI with more than 4,000 learners enrolled by Q3 FY26. More certificates are planned in veterinary medicine, mental health, and other fields.

Option

Employer partnerships

Programs like SSM Health aim to link education funding, clinical experience, and hiring. This could become a stronger sales channel if the economics prove attractive.

04 Business segments

Three revenue engines

Chamberlain40%modest

Walden38%growing fast

Medical and Veterinary21%modest

The mix uses Q3 FY26 segment revenue: Chamberlain at $197.0 million, Walden at $186.6 million, and Medical and Veterinary at $103.5 million. Chamberlain and Walden together made up most revenue in the quarter.

05 Risk factors

What could go wrong

Student financing gap

High impact · Medium odds

OBBBA changed federal student loan access, including Grad PLUS and loan limits. Covista says it is working with Sallie Mae on alternative loans, and Sallie Mae is trying to pull together a capital syndicate. If that syndicate is delayed or too expensive, students may have trouble paying for programs.

We watchDefinitive documentation for the Sallie Mae alternative financing program and any details on loan cost, coverage, and availability.

Regulatory action against proprietary schools

High impact · Medium odds

Covista operates in a sector that has often drawn attention from the Department of Education. Risks include Title IV compliance, borrower defense claims, and accreditation. A rule change or enforcement action could hurt enrollment, cash flow, or access to federal aid.

We watchDepartment of Education actions, borrower defense updates, accreditation decisions, and any new risk factor language in filings.

Chamberlain recovery stalls

Medium impact · Medium odds

Chamberlain had a Q2 enrollment decline of 1.0% after marketing and funnel conversion problems. Q3 improved, with enrollment up 0.5%, but one good quarter does not prove the turnaround is complete. Fall enrollment is the key test because intake cycles matter for this business.

We watchChamberlain applications, funnel conversion, and total enrollment in the fall cycle.

Campus expansion costs run ahead of returns

Medium impact · Medium odds

Management expects capital spending to step up in Q4 and said that level may be a proxy for 2027. The company also plans 6 new Chamberlain campuses. If new campuses fill slowly, spending could rise before revenue catches up.

We watchQ4 capital spending, 2027 campus opening costs, and enrollment at new Chamberlain sites.

Employer partnership economics stay unclear

Medium impact · Low odds

The SSM Health partnership supports the story that Covista can connect schools to employers. Management described the relationship as encouraging, but did not share specific economics. Without those details, investors cannot tell whether the model is a high-return channel or mainly a branding win.

We watchAny disclosure on SSM Health pricing, student funding terms, placement rates, or margin impact.

06 Quick answers

In one breath

What does Covista do?

Covista runs healthcare-focused schools in the U.S. Its programs train nurses, doctors, veterinarians, social workers, counselors, and other health workers.

Why did Adtalem become Covista?

Management said the new name reflects a single platform for healthcare workforce development. The rebrand became part of the Q3 FY26 story.

What is the main growth driver for Covista?

Walden is the clearest current growth driver, with Q3 FY26 enrollment up 12.3%. Chamberlain could add more upside if its enrollment recovery continues.

What is OBBBA, and why does it matter to Covista?

OBBBA changed parts of federal student lending, including Grad PLUS and loan limits. That matters because many Covista students need financing to attend school.