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American Public (APEI) to Gain From Affordable Online Programs
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American Public Education, Inc. (APEI - Free Report) gained 5% in the past three months compared with the Zacks Schools industry’s 16.5% growth.
Although the company has underperformed its industry in the said period, initiatives like affordable tuition, strategic efforts to improve student success and strong digital marketing campaigns are likely to aid the company’s performance.
An increased demand for affordable online higher education and nursing programs bodes well for APEI. The Zacks Consensus Estimate for 2024 earnings increased by 116.7% in the past 60 days. The company has a long-term earnings growth rate of 15%.
Image Source: Zacks Investment Research
Let’s discuss the factors substantiating its Zacks Rank #2 (Buy).
Affordable Tuition: American Public continued to be a leader in affordability and value. By creating affordable pathways to support employment and career advancement, it aims to help learners of all backgrounds maximize their higher education return on investment. Although in April 2023, the company implemented tuition and fee increases for its nonmilitary and veteran students, which were lower than the average in-state cost at public universities. This signifies the company's commitment to providing exceptional value and a favorable return on higher education investment for students.
Strategic Initiatives: The company has undertaken several initiatives to improve enrollment trends and student persistence. The company intends to drive students’ persistence rate by improving the quality of the student mix, releasing new tools for students and taking other initiatives that increase students’ engagement and classroom interactivity. APEI offers various competency-based education programs, which permit students to control their own pace and progress in a program.
The company has also adopted a geographical marketing approach, which focuses on using cost-effective channels and aims to reach out to college-ready students who are more likely to succeed. It also aims to strengthen its digital marketing campaigns to leverage relationships with the military, public service and other high-value student populations.
Improved Enrollment Trends: American Public has been registering impressive enrollment growth at APUS and Hondros College of Nursing segment or HCN. Net course registrations at the American Public University System segment or APUS, increased by 5.7% year-over-year in second-quarter 2023, including an 8% increase in active-duty military and nearly 10% in the veteran’s channel. Enrollment momentum continued for the 14th consecutive quarter at HCN, achieving growth of 22% year over year in the second quarter.
Despite higher costs, inflationary pressure and tepid RU enrollment, APUS and HCN’s revenue increased by 5.2% and 24.2%, respectively, year over year in the second quarter. The upside was backed by successful marketing efforts and the execution of enrollment strategies. The company expects the segments’ revenue growth and year-over-year margin expansion to continue through the end of the year.
Focus on Nursing Programs: Currently, the U.S. healthcare sector is facing a severe talent shortage, impacting care quality and widening health disparities due to nursing departures and retirements during the pandemic. With 22 campuses, APEI's Rasmussen University segment or RU, aims to bridge this gap by training new nurses. APEI is optimistic about its role in the healthcare ecosystem and dedicated to its mission for students, faculty and staff.
OneSpaWorld Holdings Limited (OSW - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. It has a trailing four-quarter earnings surprise of 42.6%, on average. The stock has gained 32.5% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and earnings per share (EPS) indicates growth of 44.5% and 117.9%, respectively, from the year-ago period’s levels.
Adtalem Global Education Inc. (ATGE - Free Report) currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 22%, on average. The stock has surged 21.1% in the past year.
The Zacks Consensus Estimate for ATGE’s 2023 sales and EPS suggests growth of 3% and 2.4%, respectively, from the year-ago period’s levels.
Hilton Worldwide Holdings Inc. (HLT - Free Report) has a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 12.5%, on average. The stock has gained 26.3% in the past year.
The Zacks Consensus Estimate for HLT’s 2023 sales and EPS suggests increases of 14.8% and 23.7%, respectively, from the year-ago period’s levels.
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American Public (APEI) to Gain From Affordable Online Programs
American Public Education, Inc. (APEI - Free Report) gained 5% in the past three months compared with the Zacks Schools industry’s 16.5% growth.
Although the company has underperformed its industry in the said period, initiatives like affordable tuition, strategic efforts to improve student success and strong digital marketing campaigns are likely to aid the company’s performance.
An increased demand for affordable online higher education and nursing programs bodes well for APEI. The Zacks Consensus Estimate for 2024 earnings increased by 116.7% in the past 60 days. The company has a long-term earnings growth rate of 15%.
Image Source: Zacks Investment Research
Let’s discuss the factors substantiating its Zacks Rank #2 (Buy).
Affordable Tuition: American Public continued to be a leader in affordability and value. By creating affordable pathways to support employment and career advancement, it aims to help learners of all backgrounds maximize their higher education return on investment. Although in April 2023, the company implemented tuition and fee increases for its nonmilitary and veteran students, which were lower than the average in-state cost at public universities. This signifies the company's commitment to providing exceptional value and a favorable return on higher education investment for students.
Strategic Initiatives: The company has undertaken several initiatives to improve enrollment trends and student persistence. The company intends to drive students’ persistence rate by improving the quality of the student mix, releasing new tools for students and taking other initiatives that increase students’ engagement and classroom interactivity. APEI offers various competency-based education programs, which permit students to control their own pace and progress in a program.
The company has also adopted a geographical marketing approach, which focuses on using cost-effective channels and aims to reach out to college-ready students who are more likely to succeed. It also aims to strengthen its digital marketing campaigns to leverage relationships with the military, public service and other high-value student populations.
Improved Enrollment Trends: American Public has been registering impressive enrollment growth at APUS and Hondros College of Nursing segment or HCN. Net course registrations at the American Public University System segment or APUS, increased by 5.7% year-over-year in second-quarter 2023, including an 8% increase in active-duty military and nearly 10% in the veteran’s channel. Enrollment momentum continued for the 14th consecutive quarter at HCN, achieving growth of 22% year over year in the second quarter.
Despite higher costs, inflationary pressure and tepid RU enrollment, APUS and HCN’s revenue increased by 5.2% and 24.2%, respectively, year over year in the second quarter. The upside was backed by successful marketing efforts and the execution of enrollment strategies. The company expects the segments’ revenue growth and year-over-year margin expansion to continue through the end of the year.
Focus on Nursing Programs: Currently, the U.S. healthcare sector is facing a severe talent shortage, impacting care quality and widening health disparities due to nursing departures and retirements during the pandemic. With 22 campuses, APEI's Rasmussen University segment or RU, aims to bridge this gap by training new nurses. APEI is optimistic about its role in the healthcare ecosystem and dedicated to its mission for students, faculty and staff.
Other Key Picks
Some other top-ranked stocks from the Zacks Consumer Discretionary sector are:
OneSpaWorld Holdings Limited (OSW - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. It has a trailing four-quarter earnings surprise of 42.6%, on average. The stock has gained 32.5% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and earnings per share (EPS) indicates growth of 44.5% and 117.9%, respectively, from the year-ago period’s levels.
Adtalem Global Education Inc. (ATGE - Free Report) currently carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 22%, on average. The stock has surged 21.1% in the past year.
The Zacks Consensus Estimate for ATGE’s 2023 sales and EPS suggests growth of 3% and 2.4%, respectively, from the year-ago period’s levels.
Hilton Worldwide Holdings Inc. (HLT - Free Report) has a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 12.5%, on average. The stock has gained 26.3% in the past year.
The Zacks Consensus Estimate for HLT’s 2023 sales and EPS suggests increases of 14.8% and 23.7%, respectively, from the year-ago period’s levels.