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In the second quarter, the company’s top and bottom lines surpassed the Zacks Consensus Estimate by 0.7% and 19.4%, respectively. On a year-over-year basis, revenues decreased 1.6%. APEI reported an adjusted loss of 6 cents per share in the year-ago quarter.
Its earnings topped the consensus mark in three of the trailing four quarters and missed on one occasion, an average surprise being 1.2%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the third quarter’s loss has remained stable at 25 cents per share in the past 60 days. The estimated figure indicates a 25% decrease from the year-ago quarter’s loss of 20 cents per share.
American Public Education, Inc. Price and EPS Surprise
The consensus mark for revenues is $149.22 million, suggesting a 0.2% year-over-year decline.
Factors to Note
Enrollments & Revenues
American Public’s third-quarter revenues are likely to have declined slightly due to a year-over-year lower contribution from Rasmussen University or the RU segment (accounted for 36.7% of total second-quarter 2023 revenues). The decline is likely to have stemmed from restricted admission policies and enrollment caps in Illinois and the Twin Cities.
APEI expects total revenues to range between -1% and 1% year over year or $148.3 million and $150.3 million in the third quarter. The company expects student enrollment in the RU segment to decline 10% year over year to approximately 13,500 students. Nursing student enrollment is likely to fall by 25% to 5,700.
For the quarter, our model predicts the RU segment’s revenues to decline by 10.9% to $54.8 million year over year.
Nonetheless, non-nursing student enrollment is expected to increase by 5% to 7,700 year over year.
The aforementioned headwinds to the quarter’s revenues are likely to have been offset by higher net course registrations in American Public University System segment or APUS (accounted for 50.6% of total Q2 2023 revenues) and increased total enrollment in Hondros College of Nursing segment or HCN (accounted for 9.2% of total Q2 2023 revenues), year over year.
The company expects the APUS segment’s total net course registrations to be 90,500-92,500, reflecting growth of 6.8% year over year. HCN segment’s total enrollment is expected to increase 17% from the prior year’s figure to an all-time high of 2,800 students.
For the third quarter, we expect revenues in the APUS and HCN segments to increase by 2% to $71.3 million and 23.3% to $14.2 million, respectively, year over year.
Margins
Meanwhile, the company is expected to witness a massive loss, most likely due to the fixed-cost campus-based operating model of the RU segment and ongoing inflationary pressures. Also, higher instructional costs and services, selling and promotional expenses and general and administrative expenditures are likely to have put pressure on the company’s margins.
The company anticipates an adjusted loss of 32-24 cents per share in the third quarter. Adjusted EBITDA is expected to be within $8.4-$10.4 million, suggesting a decline from $9.5 million reported a year ago.
For the to-be-reported quarter, we expect adjusted EBITDA margins to rise 30 basis points to 6.6% year over year.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for American Public this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here, as you will see below.
Earnings ESP: Earnings ESP is -4.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Strategic Education, Inc. or SEI (STRA - Free Report) , reported impressive results for third-quarter 2023. Its quarterly earnings and revenues topped their respective Zacks Consensus Estimate and increased year over year.
Growth across its three segments, led by continued enrollment growth in U.S. Higher Education, driven significantly by employer-affiliated enrollment, strong growth in Education Technology Services (earlier known as Alternative Learning) and improving performance in Australia/New Zealand, drove the result.
Adtalem Global Education Inc. (ATGE - Free Report) reported impressive results for first-quarter fiscal 2024. Earnings and revenues surpassed their respective Zacks Consensus Estimate and increased year over year, given solid enrollment growth and strategic initiatives.
The company's accelerated performance across five operational pillars highlights its market-leading scale and healthcare focus. The company also raised its fiscal 2024 guidance. With 80,000 students and 300,000 alumni, ATGE is well-equipped to address critical healthcare provider shortages.
Leggett & Platt, Inc. (LEG - Free Report) reported tepid third-quarter 2023 results, with earnings and sales missing the Zacks Consensus Estimate.
The top and bottom lines declined on a year-over-year basis. The downtrend was caused by persistent weak demand in the Bedding Products and Furniture and Flooring & Textile Products segments, partially offset by strong demand in the Specialized Products segment.
Image: Bigstock
Factors to Note Ahead of American Public's (APEI) Q3 Earnings
American Public Education, Inc. (APEI - Free Report) is slated to report third-quarter 2023 results on Nov 7, after market close.
In the second quarter, the company’s top and bottom lines surpassed the Zacks Consensus Estimate by 0.7% and 19.4%, respectively. On a year-over-year basis, revenues decreased 1.6%. APEI reported an adjusted loss of 6 cents per share in the year-ago quarter.
Its earnings topped the consensus mark in three of the trailing four quarters and missed on one occasion, an average surprise being 1.2%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the third quarter’s loss has remained stable at 25 cents per share in the past 60 days. The estimated figure indicates a 25% decrease from the year-ago quarter’s loss of 20 cents per share.
American Public Education, Inc. Price and EPS Surprise
American Public Education, Inc. price-eps-surprise | American Public Education, Inc. Quote
The consensus mark for revenues is $149.22 million, suggesting a 0.2% year-over-year decline.
Factors to Note
Enrollments & Revenues
American Public’s third-quarter revenues are likely to have declined slightly due to a year-over-year lower contribution from Rasmussen University or the RU segment (accounted for 36.7% of total second-quarter 2023 revenues). The decline is likely to have stemmed from restricted admission policies and enrollment caps in Illinois and the Twin Cities.
APEI expects total revenues to range between -1% and 1% year over year or $148.3 million and $150.3 million in the third quarter. The company expects student enrollment in the RU segment to decline 10% year over year to approximately 13,500 students. Nursing student enrollment is likely to fall by 25% to 5,700.
For the quarter, our model predicts the RU segment’s revenues to decline by 10.9% to $54.8 million year over year.
Nonetheless, non-nursing student enrollment is expected to increase by 5% to 7,700 year over year.
The aforementioned headwinds to the quarter’s revenues are likely to have been offset by higher net course registrations in American Public University System segment or APUS (accounted for 50.6% of total Q2 2023 revenues) and increased total enrollment in Hondros College of Nursing segment or HCN (accounted for 9.2% of total Q2 2023 revenues), year over year.
The company expects the APUS segment’s total net course registrations to be 90,500-92,500, reflecting growth of 6.8% year over year. HCN segment’s total enrollment is expected to increase 17% from the prior year’s figure to an all-time high of 2,800 students.
For the third quarter, we expect revenues in the APUS and HCN segments to increase by 2% to $71.3 million and 23.3% to $14.2 million, respectively, year over year.
Margins
Meanwhile, the company is expected to witness a massive loss, most likely due to the fixed-cost campus-based operating model of the RU segment and ongoing inflationary pressures. Also, higher instructional costs and services, selling and promotional expenses and general and administrative expenditures are likely to have put pressure on the company’s margins.
The company anticipates an adjusted loss of 32-24 cents per share in the third quarter. Adjusted EBITDA is expected to be within $8.4-$10.4 million, suggesting a decline from $9.5 million reported a year ago.
For the to-be-reported quarter, we expect adjusted EBITDA margins to rise 30 basis points to 6.6% year over year.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for American Public this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here, as you will see below.
Earnings ESP: Earnings ESP is -4.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Public currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Some Recent Consumer Discretionary Releases
Strategic Education, Inc. or SEI (STRA - Free Report) , reported impressive results for third-quarter 2023. Its quarterly earnings and revenues topped their respective Zacks Consensus Estimate and increased year over year.
Growth across its three segments, led by continued enrollment growth in U.S. Higher Education, driven significantly by employer-affiliated enrollment, strong growth in Education Technology Services (earlier known as Alternative Learning) and improving performance in Australia/New Zealand, drove the result.
Adtalem Global Education Inc. (ATGE - Free Report) reported impressive results for first-quarter fiscal 2024. Earnings and revenues surpassed their respective Zacks Consensus Estimate and increased year over year, given solid enrollment growth and strategic initiatives.
The company's accelerated performance across five operational pillars highlights its market-leading scale and healthcare focus. The company also raised its fiscal 2024 guidance. With 80,000 students and 300,000 alumni, ATGE is well-equipped to address critical healthcare provider shortages.
Leggett & Platt, Inc. (LEG - Free Report) reported tepid third-quarter 2023 results, with earnings and sales missing the Zacks Consensus Estimate.
The top and bottom lines declined on a year-over-year basis. The downtrend was caused by persistent weak demand in the Bedding Products and Furniture and Flooring & Textile Products segments, partially offset by strong demand in the Specialized Products segment.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.