Apollo Group, Inc

Company Description

Apollo Group, Inc. has been providing higher education to working adults for over 25 years. They operate through their subsidiaries, the University of Phoenix, Inc., the Institute for Professional Development, the College for Financial Planning Institutes Corporation, Western International University, Inc., and Apollo Learning Group, Inc.

Fourth Straight Surprise

On Jun 29 Apollo reported third-quarter results that included a 22% enrollment growth. The company now has 420,700 students. The increased student drove revenues 26% higher to the company's first ever $1 billion quarter.

Earnings came in at $1.26, beating the Zacks Consensus Estimate by 13 cents. This was Apollo's fourth consecutive earnings surprise.

Analysts Re-grade

Since the report, analysts have been revising estimates higher. The average estimate is now $4.17 for 2009, up from $3.99. The Zacks consensus for 2010 is up to $5.20, from $4.85 in that time frame.

These levels would mean a 47% annual earnings growth rate for this year and another 25% in 2010.

Industry Leader

Cognizant is the top rated education company using the Zacks Rank. When looking at the comparisons to its peers it is easy to see why. The company's ROE is a staggering 60% compared to the 18% industry average.

Additionally, Apollo's net profit margin of 20% is almost double the average of its peers.

The Chart

Below you can see just how sharply the Zacks Consensus Estimates have been rising. Each colored line represents an annual consensus estimate.

Read the full analyst report on APOL