American Public Education (APEI - Free Report) is an online provider of higher education focused primarily on serving the military and public service communities. The company operates through two segments, American Public Education and Hondros College of Nursing. American Public Education was founded in 1991 and is headquartered in Charles Town, West Virginia. The stock is the Bear of the Day after being downgraded to a Zacks Rank #5 (Strong Sell) and after poor earnings outlook earlier in the month.
APEI has a market cap of $300 million and a forward PE of 10. The stock sports Zacks Style Scores of “F” in Momentum after the stock lost a third of its value after their last earnings report.
The company reported Q2 EPS on August 9thth, with the numbers coming in at $0.41 verse the $0.39expected. Revenues came in above the expected at $76.7 million against the $75 million expected.
While the quarter saw a beat, the outlook was pretty terrible. The company guided Q3 $0.26-31 verse the $0.37 expected. The company also expects revenues to slow 3-6% year over year. Perhaps the worst part was the new course registration, which was down 22% from last year.
Investors sold the stock down 25% on the EPS miss. There has been no relief since as the stock continues lower, down almost 40% since earnings.
So is it time to buy? Looking at estimate revisions, the answer is no.
Over the last 60 days, estimates have been revised lower for all time frames. For fiscal year 2016, the numbers have been taken down 10%, from $2.04 to $1.84. For 2017, estimates are now seen at $1.52, down from $1.97 or 22%.
Investors should look for the stock to continue to come under pressure until estimates turn around. However, with new course registration down so much, the company might continue to see revisions to the downside.
A Better Option
Lincoln Education (LINC - Free Report) is a Zacks Rank #1 (Strong Buy) that is a leading and diversified for-profit provider of a career-oriented post-secondary education headquartered in West Orange, New Jersey. It offers bachelor's degree, associate's degree, and diploma and certificate programs in automotive technology, skilled trades, healthcare services, hospitality services, and business and information technology areas to recent high school graduates and working adults.
Lincoln has a market cap of $56 million and has expected EPS growth of 10%.
On August 8th, the company beat EPS by a penny and beat on revenue estimates. Revisions to earnings estimates have spiked higher over the last year.
Note: Want more articles from this author? Scroll up to the top of this article and click the FOLLOW AUTHOR button to get an email each time a new article is published.
So Where Are the Profitable Trades?
Be sure to short or avoid this Bear Stock of the Day. Now would you like to see Zacks' recommendations that have the best profit potential? Starting today, for the next month, you can follow all our private buys and sells in real time from value to momentum . . . from stocks under $10 to ETF and option moves . . . from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors. Click here for all Zacks trades >>