Back to top

Image: Bigstock

American Public (APEI) to Report Q4 Earnings: What Awaits?

Read MoreHide Full Article

American Public Education, Inc. (APEI - Free Report) is scheduled to report fourth-quarter 2019 results on Mar 10, after the closing bell.

In the last reported quarter, the top and bottom lines topped the Zacks Consensus Estimate by 2.1% and 1000%, respectively. However, earnings and revenues declined 66.7% and 7%, respectively. Lower contribution from the Hondros College of Nursing (“HCN”) and APEI segments negatively impacted the results.

Trend in Estimate Revision

The Zacks Consensus Estimate for earnings for the quarter to be reported has been unchanged at 37 cents per share over the past 60 days. The said figure indicates a 32.7% decrease from the year-ago earnings of 55 cents per share. The consensus mark for revenues is $73.1 million, suggesting 5% year-over-year fall.

American Public Education, Inc. Price and EPS Surprise

Factors to Note

American Public’s enrollments have been declining over the last five quarters, thereby resulting in lower revenues. Especially, enrollment from students using FSA, TA and VA is highly volatile, and subject to stringent government regulations and other regulatory actions. The trend is expected to have continued in the quarter-to-be-reported as well.

Particularly, students’ enrollment using FSA has been declining ever since the company shifted focus on improving quality and mix. Implementation of new admission processes, intense competition in the markets served and adjustments in marketing activities have been denting its performance.

At APUS, the company projects net course registrations between a 2% decrease and 2% increase for fourth-quarter 2019. Registrations by new students are anticipated between 1% decline and 3% growth from the year-ago quarter.

At HCN, it expects total and new student enrollment to decline 20-24% from the year-ago quarter. Moreover, it anticipates total revenues to decline 3-7% year over year.

The company predicts the bottom line within 35-40 cents per share.

Initiatives to improve enrollment trends and student persistence like competency-based programs, course redesign project, changes in curriculum at HCN and new campuses have been encouraging. Also, affordable tuitions to bridge the skill gap and reduce cost of higher education for students have been gaining traction.

What the Zacks Model Says

Our proven model does not conclusively predict an earnings beat for American Public — which share space with Career Education Corporation (CECO - Free Report) , New Oriental Education & Technology Group Inc. (EDU - Free Report) and Lincoln Educational Services Corporation (LINC - Free Report) in the Zacks Schools industry — this time around. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below.

Earnings ESP: American Public has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: It currently carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.

This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.

See their latest picks free >>

Published in