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American Public Education (APEI) Up 25.9% Since Last Earnings Report: Can It Continue?
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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 25.9% 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 Q2 Earnings Meet Estimates, Margins Rise
American Public Education reported second-quarter 2024, wherein earnings met the Zacks Consensus Estimate and significantly improved from the previous year. Revenues marginally missed the analysts’ expectations but increased year over year on the back of contributions from the APUS, HCN and RU segments. Yet, lower revenues from GSUSA partially offset the growth.
The company has been benefiting from consistent enrollment growth at APUS and HCN, along with improvement at Rasmussen. Also, select tuition and fee increases, combined with the positive impact of cost reductions and realignments, added to the growth.
Delving Deeper
The company reported an adjusted earnings per share (EPS) of 1 cent against the year-ago quarter’s loss of 25 cents. The metric came in line with the Zacks Consensus Estimate.
Total revenues of $152.9 million missed the consensus mark of $154 million by 0.8% but grew 3.9% from the year-ago period. Net course registration increases and select tuition and fee increases implemented in 2023 and 2024 aided the results.
Total costs and expenses decreased 29.1% year over year to $150.7 million. Adjusted EBITDA increased 24% year over year to $10.9 million. Adjusted EBITDA margin of 7% expanded from 6% year over year.
Segment Discussion
APUS: Revenues of $77 million rose 5% from the year-ago period’s levels. The uptick was primarily due to growth in registrations and the impact of select tuition increases in 2023. APUS’ total net course registration increased 1.7% from the year-ago period to 89,800. In the quarter, military registrations were up 1%. Adjusted EBITDA margin of 25% contracted from 28% year over year, due to higher enrollment, select price increases, and lower marketing spend.
RU: The segment reported revenues of $53 million for the quarter, up 2% from a year ago. This was due to growth in online enrollment and an increase in tuition. RU’s total student enrollment fell 2.2% to 13,600 due to a 9% decline in On-ground enrollment but a 4% increase in Online enrollment. Adjusted EBITDA margin of negative 9% narrowed from negative 14% reported in the prior year due to a stabilizing environment and first positive enrollment comp since acquisition.
HCN: The segment’s revenues rose 15% year over year to $16.4 million. The increase was backed by solid growth in total student enrollment. Total student enrollment at HCN increased 9.4% from the prior-year quarter’s levels to 3,300. Adjusted EBITDA margin was negative 2% versus 1% reported a year ago.
GSUSA: The segment’s revenues decreased 14% year over year to $6.4 million impacted by government spending uncertainty. Adjusted EBITDA margin came in at negative 11% against 11% a year ago.
Financials
At the end of the second quarter, American Public had total cash, cash equivalents, and restricted cash of $156.2 million, up from $144.3 million at 2023-end.
Q3 Guidance
APEI expects total revenues to increase 1-3% year over year to $152-$155 million. It anticipates EPS between a loss of 6 cents and an earnings of 5 cents versus a loss of 25 cents per share reported a year ago. Adjusted EBITDA is expected to be within $9-$12 million, a decline of 34-56% year over year.
APUS’ total net course registrations are likely to be 90,500-92,300, reflecting a flat to 2% decline year over year. HCN’s total enrollment is expected to increase 10% from the prior year’s figure to 3,100 students. RU’s student enrollment is expected to be up 0.1% from the year-ago quarter’s figure of 13,500. On-ground student enrollment is likely to decline 6% to 6,030, while Online student enrollment is expected to rise 4% to 7,440 year over year.
2024 Guidance Maintained
Total revenues are expected to grow 3-5% year over year to $620-$630 million. Adjusted EBITDA is now expected to be between $60 and $70 million, reflecting 1-17% growth year over year. Capital expenditures are still expected to be in the range of $17-$20 million, reflecting 22-44% growth.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -101.33% due to these changes.
VGM Scores
Currently, American Public Education has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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 these revisions indicates a downward shift. Notably, American Public Education has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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American Public Education (APEI) Up 25.9% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for American Public Education (APEI - Free Report) . Shares have added about 25.9% 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 Q2 Earnings Meet Estimates, Margins Rise
American Public Education reported second-quarter 2024, wherein earnings met the Zacks Consensus Estimate and significantly improved from the previous year. Revenues marginally missed the analysts’ expectations but increased year over year on the back of contributions from the APUS, HCN and RU segments. Yet, lower revenues from GSUSA partially offset the growth.
The company has been benefiting from consistent enrollment growth at APUS and HCN, along with improvement at Rasmussen. Also, select tuition and fee increases, combined with the positive impact of cost reductions and realignments, added to the growth.
Delving Deeper
The company reported an adjusted earnings per share (EPS) of 1 cent against the year-ago quarter’s loss of 25 cents. The metric came in line with the Zacks Consensus Estimate.
Total revenues of $152.9 million missed the consensus mark of $154 million by 0.8% but grew 3.9% from the year-ago period. Net course registration increases and select tuition and fee increases implemented in 2023 and 2024 aided the results.
Total costs and expenses decreased 29.1% year over year to $150.7 million. Adjusted EBITDA increased 24% year over year to $10.9 million. Adjusted EBITDA margin of 7% expanded from 6% year over year.
Segment Discussion
APUS: Revenues of $77 million rose 5% from the year-ago period’s levels. The uptick was primarily due to growth in registrations and the impact of select tuition increases in 2023. APUS’ total net course registration increased 1.7% from the year-ago period to 89,800. In the quarter, military registrations were up 1%. Adjusted EBITDA margin of 25% contracted from 28% year over year, due to higher enrollment, select price increases, and lower marketing spend.
RU: The segment reported revenues of $53 million for the quarter, up 2% from a year ago. This was due to growth in online enrollment and an increase in tuition. RU’s total student enrollment fell 2.2% to 13,600 due to a 9% decline in On-ground enrollment but a 4% increase in Online enrollment. Adjusted EBITDA margin of negative 9% narrowed from negative 14% reported in the prior year due to a stabilizing environment and first positive enrollment comp since acquisition.
HCN: The segment’s revenues rose 15% year over year to $16.4 million. The increase was backed by solid growth in total student enrollment. Total student enrollment at HCN increased 9.4% from the prior-year quarter’s levels to 3,300. Adjusted EBITDA margin was negative 2% versus 1% reported a year ago.
GSUSA: The segment’s revenues decreased 14% year over year to $6.4 million impacted by government spending uncertainty. Adjusted EBITDA margin came in at negative 11% against 11% a year ago.
Financials
At the end of the second quarter, American Public had total cash, cash equivalents, and restricted cash of $156.2 million, up from $144.3 million at 2023-end.
Q3 Guidance
APEI expects total revenues to increase 1-3% year over year to $152-$155 million. It anticipates EPS between a loss of 6 cents and an earnings of 5 cents versus a loss of 25 cents per share reported a year ago. Adjusted EBITDA is expected to be within $9-$12 million, a decline of 34-56% year over year.
APUS’ total net course registrations are likely to be 90,500-92,300, reflecting a flat to 2% decline year over year. HCN’s total enrollment is expected to increase 10% from the prior year’s figure to 3,100 students. RU’s student enrollment is expected to be up 0.1% from the year-ago quarter’s figure of 13,500. On-ground student enrollment is likely to decline 6% to 6,030, while Online student enrollment is expected to rise 4% to 7,440 year over year.
2024 Guidance Maintained
Total revenues are expected to grow 3-5% year over year to $620-$630 million. Adjusted EBITDA is now expected to be between $60 and $70 million, reflecting 1-17% growth year over year. Capital expenditures are still expected to be in the range of $17-$20 million, reflecting 22-44% growth.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -101.33% due to these changes.
VGM Scores
Currently, American Public Education has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. 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 these revisions indicates a downward shift. Notably, American Public Education has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.