Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

Apollo Group Inc. (APOL - Analyst Report) recently announced that the accreditation for its flagship university, University of Phoenix (UOP), was renewed. While the renewal cleared a major overhang for this private education service provider, it also pushed up Apollo’s share price slightly higher. The University accounts for more than 90% of Apollo’s revenues.

In February this year, the Higher Learning Commission’s (HLC) peer review team recommended that UOP be put on probationary status as it had concerns regarding the latter’s administrative and governance structure. However, later in May, an HLC advisory panel, acting on the review team’s report, recommended that UOP’s accreditation be renewed and the University be placed on notice status for two years. The advisory panel’s recommendation was based on the evidence of governance changes and new information submitted by UOP.

Going with the advisory panel’s recommendation, on Jul 9, HLC re-affirmed UOP’s accreditation through the 2022-2023 academic year and also placed the University on notice status for a two-year period. The UOP will now have to submit a Notice Report by fall 2014, providing evidence that it meets all standards for accreditation. Apollo’s another subsidiary, Western International University, also received a similar notice from the HLC.

Losing the HLC accreditation would have hurt UOP’s right to operate in certain states and participate in the Title IV programs, thus hurting its business considerably. A significant percentage of the company’s students rely on the loans included in the Title IV programs as they are offered at below-market interest rates by the Department of Education. Employers, other higher education institutions and governmental entities might not have recognized the degrees and credits earned by UOP students had the university lost the accreditation.

Apollo carries a Zacks Rank #3 (Hold). It reported mixed fiscal third-quarter results last month, beating the Zacks Consensus Estimate for earnings but missing the same for revenues due to persistent weak enrollment growth at the UOP.

Other education companies worth a look are New Oriental Education & Technology Group (EDU - Snapshot Report), ATA, Inc. and K12, Inc. (LRN - Snapshot Report), all carrying a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%