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Why Is American Public Education (APEI) Up 7.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for American Public Education (APEI - Free Report) . Shares have added about 7.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is American Public Education due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
American Public Q3 Earnings Beat Estimate
American Public Education reported impressive third-quarter 2020 results, wherein both the top and the bottom line beat the Zacks Consensus Estimate and grew year over year.
Nonetheless, the metrics exceeded management guidance on enrollment growth across the segments.
In this regard, Angela Selden, chief executive officer of American Public, stated, " Even with increased investment in technology to improve the student experience and additional marketing spend to support the APUS brand, the strong enrollments at APUS combined with the turnaround at Hondros resulted in year-over-year margin expansion."
Delving Deeper
For the third quarter, American Public reported adjusted earnings of 18 cents per share. In the prior-year quarter, the company reported a loss of 10 cents per share.
Total revenues of $79.1 million surpassed the consensus mark of $76 million by 4.1% and grew 16.6% from the year-ago period. The upside was mainly driven by solid performance across the business.
During the quarter, total costs and expenses, as a percentage of revenues, improved 850 basis points to 95.8% year over year.
Segment Discussion
APEI: Third-quarter revenues of $69.6 million grew 13.7% from the year-ago period. Within the APEI segment, American Public University System’s (“APUS”) student enrollment grew 7% from the comparable year-ago period to 86,300 at September-end. For the quarter, total net course registration jumped 18% from the year-ago period to 90,300. Net course registrations by new students surged a notable 25% from the prior-year figure to 13,500.
HCN: During the third quarter, segment’s revenues rose 42.5% year over year to $9.5 million owing to improved enrollments. Total student enrollment at HCN increased 38% to 1,950, while new student enrollment rose 88% from the prior-year quarter to 649.
For the quarter, inter-segment elimination revenues came in at ($18) million, compared with ($25) million in the prior-year quarter.
Financials
As of Sep 30, 2020, American Public had total cash and cash equivalents of $228 million compared with $202.7 million at 2019-end. Capital expenditure totaled $1.3 million for the third quarter compared with $1.2 million a year ago.
Fourth-Quarter 2020 Guidance
For the fourth quarter of 2020, the company expects total revenues to grow 10-14% year over year. In the year-ago period, revenues declined 3.3% year over year. It anticipates earnings within 41-46 cents per share, indicating growth from 37 cents reported in the year-ago quarter.
Net course registrations by new students at APUS are expected to increase within 11-15% year over year. Total net course registrations are likely to grow 6-10% year over year. HCN’s new student and total student enrollment is expected to grow nearly 34% from the prior year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, American Public Education has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. 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 broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, American Public Education has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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Why Is American Public Education (APEI) Up 7.4% Since Last Earnings Report?
A month has gone by since the last earnings report for American Public Education (APEI - Free Report) . Shares have added about 7.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is American Public Education due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
American Public Q3 Earnings Beat Estimate
American Public Education reported impressive third-quarter 2020 results, wherein both the top and the bottom line beat the Zacks Consensus Estimate and grew year over year.
Nonetheless, the metrics exceeded management guidance on enrollment growth across the segments.
In this regard, Angela Selden, chief executive officer of American Public, stated, " Even with increased investment in technology to improve the student experience and additional marketing spend to support the APUS brand, the strong enrollments at APUS combined with the turnaround at Hondros resulted in year-over-year margin expansion."
Delving Deeper
For the third quarter, American Public reported adjusted earnings of 18 cents per share. In the prior-year quarter, the company reported a loss of 10 cents per share.
Total revenues of $79.1 million surpassed the consensus mark of $76 million by 4.1% and grew 16.6% from the year-ago period. The upside was mainly driven by solid performance across the business.
During the quarter, total costs and expenses, as a percentage of revenues, improved 850 basis points to 95.8% year over year.
Segment Discussion
APEI: Third-quarter revenues of $69.6 million grew 13.7% from the year-ago period. Within the APEI segment, American Public University System’s (“APUS”) student enrollment grew 7% from the comparable year-ago period to 86,300 at September-end. For the quarter, total net course registration jumped 18% from the year-ago period to 90,300. Net course registrations by new students surged a notable 25% from the prior-year figure to 13,500.
HCN: During the third quarter, segment’s revenues rose 42.5% year over year to $9.5 million owing to improved enrollments. Total student enrollment at HCN increased 38% to 1,950, while new student enrollment rose 88% from the prior-year quarter to 649.
For the quarter, inter-segment elimination revenues came in at ($18) million, compared with ($25) million in the prior-year quarter.
Financials
As of Sep 30, 2020, American Public had total cash and cash equivalents of $228 million compared with $202.7 million at 2019-end. Capital expenditure totaled $1.3 million for the third quarter compared with $1.2 million a year ago.
Fourth-Quarter 2020 Guidance
For the fourth quarter of 2020, the company expects total revenues to grow 10-14% year over year. In the year-ago period, revenues declined 3.3% year over year. It anticipates earnings within 41-46 cents per share, indicating growth from 37 cents reported in the year-ago quarter.
Net course registrations by new students at APUS are expected to increase within 11-15% year over year. Total net course registrations are likely to grow 6-10% year over year. HCN’s new student and total student enrollment is expected to grow nearly 34% from the prior year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, American Public Education has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. 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 broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. Notably, American Public Education has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.