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American Public Education (APEI) Down 21.2% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for American Public Education (APEI - Free Report) . Shares have lost about 21.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is American Public Education due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
American Public Q2 Earnings & Revenues Beat, Up Y/Y
American Public Education, Inc. reported impressive second-quarter 2020 results, wherein both the top and bottom lines topped the Zacks Consensus Estimate, as well as grew on a year-over-year basis. Notably, both the metrics exceeded management’s respective guidance on the back of enrollment growth across the segments and the ongoing turnaround at Hondros.
Angela Selden, chief executive officer of American Public said, "The growth in enrollments in the second quarter as compared to a year ago reflects the ongoing transformation that has been taking place at APEI over the past year. At HCN, we have improved curriculum and made pre-licensure degrees more readily available to individuals interested in the nursing field. At APUS, students looking to improve their future career prospects chose APUS for its affordability and high-quality academic programs."
The company expects to further emphasize on helping adult learners maximize their higher education return on investment with relevant programs at affordable prices.
Delving Deeper
American Public reported adjusted earnings of 45 cents per share, which comfortably topped the consensus estimate of 23 cents by 95.7% and increased a whopping 50% on a year-over-year basis.
Total revenues of $82.1 million also surpassed the consensus mark of $77.5 million by almost 6% and grew 16.4% from the year-ago period. The upside was mainly driven by solid performance across the business.
Total costs and expenses, as a percentage of revenues, contracted 300 basis points to 89% year over year.
Segment Discussion
APEI: Revenues of $73.5 million grew 15.9% from the year-ago period. Within the APEI segment, American Public University System’s (“APUS”) student enrollment grew 4% from the comparable year-ago period to 83,700 at June-end. For the quarter, total net course registration jumped 18% from the year-ago period to 89,600. Net course registrations by new students also surged a notable 30% from the prior-year figure to 12,100.
HCN: Segment’s revenues rose 20.5% year over year to $8.6 million owing to improved enrollments. Total student enrollment at HCN increased 14% to 1,750, while new student enrollment rose 56% from the prior-year quarter to 490.
For the quarter, inter-segment elimination totaled $22 million.
Financials
As of Jun 30, 2020, American Public had total cash and cash equivalents of $216 million compared with $202.7 million at 2019-end. Capital expenditure totaled $1 million for the second quarter compared with $1.4 million in the year-ago period.
Third-Quarter 2020 Guidance
The company expects total revenues to grow 10-14% year over year. In the year-ago period, revenues declined 7% year over year. It anticipates earnings within 5-10 cents per share, indicating a decline from the year-ago reported figure of 11 cents.
Net course registrations by new students at APUS are expected to increase within 10-14% year over year. Total net course registrations are likely to grow 8-12% year over year. HCN’s new student enrollment is likely to increase about 88%, while total student enrollment is expected to grow nearly 38% from the prior year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 100% due to these changes.
VGM Scores
Currently, American Public Education has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise American Public Education has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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American Public Education (APEI) Down 21.2% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for American Public Education (APEI - Free Report) . Shares have lost about 21.2% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is American Public Education due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
American Public Q2 Earnings & Revenues Beat, Up Y/Y
American Public Education, Inc. reported impressive second-quarter 2020 results, wherein both the top and bottom lines topped the Zacks Consensus Estimate, as well as grew on a year-over-year basis. Notably, both the metrics exceeded management’s respective guidance on the back of enrollment growth across the segments and the ongoing turnaround at Hondros.
Angela Selden, chief executive officer of American Public said, "The growth in enrollments in the second quarter as compared to a year ago reflects the ongoing transformation that has been taking place at APEI over the past year. At HCN, we have improved curriculum and made pre-licensure degrees more readily available to individuals interested in the nursing field. At APUS, students looking to improve their future career prospects chose APUS for its affordability and high-quality academic programs."
The company expects to further emphasize on helping adult learners maximize their higher education return on investment with relevant programs at affordable prices.
Delving Deeper
American Public reported adjusted earnings of 45 cents per share, which comfortably topped the consensus estimate of 23 cents by 95.7% and increased a whopping 50% on a year-over-year basis.
Total revenues of $82.1 million also surpassed the consensus mark of $77.5 million by almost 6% and grew 16.4% from the year-ago period. The upside was mainly driven by solid performance across the business.
Total costs and expenses, as a percentage of revenues, contracted 300 basis points to 89% year over year.
Segment Discussion
APEI: Revenues of $73.5 million grew 15.9% from the year-ago period. Within the APEI segment, American Public University System’s (“APUS”) student enrollment grew 4% from the comparable year-ago period to 83,700 at June-end. For the quarter, total net course registration jumped 18% from the year-ago period to 89,600. Net course registrations by new students also surged a notable 30% from the prior-year figure to 12,100.
HCN: Segment’s revenues rose 20.5% year over year to $8.6 million owing to improved enrollments. Total student enrollment at HCN increased 14% to 1,750, while new student enrollment rose 56% from the prior-year quarter to 490.
For the quarter, inter-segment elimination totaled $22 million.
Financials
As of Jun 30, 2020, American Public had total cash and cash equivalents of $216 million compared with $202.7 million at 2019-end. Capital expenditure totaled $1 million for the second quarter compared with $1.4 million in the year-ago period.
Third-Quarter 2020 Guidance
The company expects total revenues to grow 10-14% year over year. In the year-ago period, revenues declined 7% year over year. It anticipates earnings within 5-10 cents per share, indicating a decline from the year-ago reported figure of 11 cents.
Net course registrations by new students at APUS are expected to increase within 10-14% year over year. Total net course registrations are likely to grow 8-12% year over year. HCN’s new student enrollment is likely to increase about 88%, while total student enrollment is expected to grow nearly 38% from the prior year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 100% due to these changes.
VGM Scores
Currently, American Public Education has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. It comes with little surprise American Public Education has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.