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American Public (APEI) Rectifies Q1 FY23 Revenue Guidance
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American Public Education, Inc. (APEI - Free Report) provided a correction to its previously announced first-quarter 2023 revenue guidance. During the fourth-quarter 2022 result, APEI expected total revenue to be in the range of $155.1-$157.1 million, which reflected a clerical error. The first quarter revenue guidance should have been $148.1-$150.1 million down from $154.7 million a year ago.
Now for the first quarter, the company anticipates exceeding the high end of its adjusted EBITDA guidance of $2.4-$4.1 million. Also, it expects revenues to be near the high-end of its corrected guidance. Shares of this leading education provider jumped 4.05% on Apr 12.
In addition to this, the APUS segment’s total net course registrations are likely to be approximately 96,300, implying growth of 2.4% year over year. HCN’s total student enrollment is expected to increase 10% to 2,700. RU’s student enrollment is likely to fall 12% to 14,300. Nursing student enrollment is likely to fall 19% to 6,800. Non-nursing student enrollment is expected to decline 4% year over year to 7,500.
American Public has been registering impressive enrollment growth at APUS and HCN. The upside was backed by successful marketing efforts and the execution of enrollment strategies. The APUS segment has been benefiting from the increase in military-related registrations from students utilizing TA and improvements made by the Army to the ArmyIgnitED system. HCN mainly benefited from the opening of the Akron campus in April 2021, the Detroit, MI, campus in October 2022 and a strong Indianapolis campus. HCN's focus on student support services, impressive reputation in the communities and ability to deliver good educational outcomes to meet the needs of students and the hospital system have been aiding the company.
However, RU has been declining due to caps on nursing student enrollment at certain campuses, reduced demand for nursing education due to record-low unemployment in some markets and fewer available nursing faculty to educate and oversee clinicals. APEI expects this trend to continue through 2023, owing to the impacts of inflation and higher labor costs, particularly at the RU segment and enrollment trends.
Image Source: Zacks Investment Research
Shares of American Public have declined 33.1% in the past month compared with the Zacks Schools industry’s 1.2% fall.
We believe the company’s strategic initiatives will improve enrollment going forward.
Zacks Rank & Key Picks
American Public currently carries a Zacks Rank #5 (Strong Sell).
Perdoceo Education Corporation (PRDO - Free Report) : This Zacks Rank #1 company has been benefiting from an improvement in enrollment trends at both of its segments — Colorado Technical University (CTU) and American InterContinental University (AIU). Apart from higher revenues, operating efficiencies at CTU and AIU and the Trident acquisition bode well. The company’s focus on increased investments in technology and student-serving processes drives growth.
Earnings for 2023 are expected to gain 6.8%. PRDO has a trailing four-quarter earnings surprise of 16.3%, on average.
Grand Canyon Education, Inc. (LOPE - Free Report) : This Phoenix, AZ-based company is an education services provider to colleges and universities in the United States and has developed key technological solutions, infrastructure and operational processes to deliver superior services in these areas on a large scale. The company has been benefiting from an increase in the Grand Canyon University (GCU) traditional campus enrollments and higher revenue per student. Also, the company has been working with GCU on two main strategies (B2B and the rollout of new and relevant programs) to offset the downturn in online enrollment.
Grand Canyon Education currently carries a Zacks Rank #2 (Buy). This company’s earnings estimate for 2023 is expected to register 7.2% growth from a year ago. LOPE has a trailing four-quarter earnings surprise of 6.1%, on average.
PowerSchool Holdings, Inc. : Based in Folsom, CA, PowerSchool provides cloud-based software to the K-12 education market. PowerSchool is one of the leaders in providing mission-critical solutions to the growing online K-12 schooling market. Growing pipeline and demand for the company’s differentiated unified platform of best-in-class solutions will benefit PowerSchool in generating revenues for the near term. Also, cross-/upselling activity continues at a robust pace with more than 500 transactions in the third quarter. Management is witnessing a variety of sales progressions across product types.
PowerSchool currently carries a Zacks Rank #2. The company’s earnings for 2023 are expected to grow 5.9%. PWSC has a trailing three-quarter earnings surprise of 25.4%, on average.
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American Public (APEI) Rectifies Q1 FY23 Revenue Guidance
American Public Education, Inc. (APEI - Free Report) provided a correction to its previously announced first-quarter 2023 revenue guidance. During the fourth-quarter 2022 result, APEI expected total revenue to be in the range of $155.1-$157.1 million, which reflected a clerical error. The first quarter revenue guidance should have been $148.1-$150.1 million down from $154.7 million a year ago.
Now for the first quarter, the company anticipates exceeding the high end of its adjusted EBITDA guidance of $2.4-$4.1 million. Also, it expects revenues to be near the high-end of its corrected guidance. Shares of this leading education provider jumped 4.05% on Apr 12.
In addition to this, the APUS segment’s total net course registrations are likely to be approximately 96,300, implying growth of 2.4% year over year. HCN’s total student enrollment is expected to increase 10% to 2,700. RU’s student enrollment is likely to fall 12% to 14,300. Nursing student enrollment is likely to fall 19% to 6,800. Non-nursing student enrollment is expected to decline 4% year over year to 7,500.
American Public has been registering impressive enrollment growth at APUS and HCN. The upside was backed by successful marketing efforts and the execution of enrollment strategies. The APUS segment has been benefiting from the increase in military-related registrations from students utilizing TA and improvements made by the Army to the ArmyIgnitED system. HCN mainly benefited from the opening of the Akron campus in April 2021, the Detroit, MI, campus in October 2022 and a strong Indianapolis campus. HCN's focus on student support services, impressive reputation in the communities and ability to deliver good educational outcomes to meet the needs of students and the hospital system have been aiding the company.
However, RU has been declining due to caps on nursing student enrollment at certain campuses, reduced demand for nursing education due to record-low unemployment in some markets and fewer available nursing faculty to educate and oversee clinicals. APEI expects this trend to continue through 2023, owing to the impacts of inflation and higher labor costs, particularly at the RU segment and enrollment trends.
Image Source: Zacks Investment Research
Shares of American Public have declined 33.1% in the past month compared with the Zacks Schools industry’s 1.2% fall.
We believe the company’s strategic initiatives will improve enrollment going forward.
Zacks Rank & Key Picks
American Public currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Perdoceo Education Corporation (PRDO - Free Report) : This Zacks Rank #1 company has been benefiting from an improvement in enrollment trends at both of its segments — Colorado Technical University (CTU) and American InterContinental University (AIU). Apart from higher revenues, operating efficiencies at CTU and AIU and the Trident acquisition bode well. The company’s focus on increased investments in technology and student-serving processes drives growth.
Earnings for 2023 are expected to gain 6.8%. PRDO has a trailing four-quarter earnings surprise of 16.3%, on average.
Grand Canyon Education, Inc. (LOPE - Free Report) : This Phoenix, AZ-based company is an education services provider to colleges and universities in the United States and has developed key technological solutions, infrastructure and operational processes to deliver superior services in these areas on a large scale. The company has been benefiting from an increase in the Grand Canyon University (GCU) traditional campus enrollments and higher revenue per student. Also, the company has been working with GCU on two main strategies (B2B and the rollout of new and relevant programs) to offset the downturn in online enrollment.
Grand Canyon Education currently carries a Zacks Rank #2 (Buy). This company’s earnings estimate for 2023 is expected to register 7.2% growth from a year ago. LOPE has a trailing four-quarter earnings surprise of 6.1%, on average.
PowerSchool Holdings, Inc. : Based in Folsom, CA, PowerSchool provides cloud-based software to the K-12 education market. PowerSchool is one of the leaders in providing mission-critical solutions to the growing online K-12 schooling market. Growing pipeline and demand for the company’s differentiated unified platform of best-in-class solutions will benefit PowerSchool in generating revenues for the near term. Also, cross-/upselling activity continues at a robust pace with more than 500 transactions in the third quarter. Management is witnessing a variety of sales progressions across product types.
PowerSchool currently carries a Zacks Rank #2. The company’s earnings for 2023 are expected to grow 5.9%. PWSC has a trailing three-quarter earnings surprise of 25.4%, on average.