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American Public (APEI) Down 10.4% Since Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for American Public Education, Inc. (APEI - Free Report) . Shares have lost about 10.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 Education Misses on Q1 Earnings
American Public Education reported first-quarter adjusted earnings per share of $0.28, which missed the Zacks Consensus Estimate of $0.29 by 3.5%. Adjusted earnings also dropped 56.3% year over year due to declining revenues.
Revenues and Enrollment
Total revenue of $75.7 million surpassed the Zacks Consensus Estimate of $74.5 million by 1.6%. Revenues, however, decreased 9.9% year over year owing to declining revenues at both American Public University System and Hondros College of Nursing.
The company operates in two segments – American Public Education Segment (APEI - Free Report) and Hondros College, Nursing Programs (HCN).
APEI segment revenues dropped 10.7% to $68.1 million from $76.3 million in the prior-year quarter due to a 9% decrease in net course registrations.
Net course registrations declined on a 26% decrease in net course registrations by new students using Federal Student Aid (FSA) and an 18% fall in military tuition assistance (TA).
The downside at FSA may be attributed to the company’s efforts to improve its quality mix of students, adjustments to its marketing efforts and increasing competition for online students. The decline in Net course registrations using TA is largely due to changes in the TA program by the Department of Defense.
Completion rates of undergraduate students using FSA at APUS increased approximately 19% year over year.
New student enrollments using veteran benefits slipped 13%, while enrollment of students using cash and other sources increased 8%, both on a year-over-year basis.
HCN revenues fell 1.8% to $7.6 million from the prior-year quarter owing to lower enrollments.
Total enrollment at the Hondros College Nursing Programs declined 8% year over year to 1,710 students, while new student enrollment increased 22% year over year.
Inside the Headline Numbers
Income from operations before interest income and income taxes was $8.3 million, compared with $16.0 million in the prior-year quarter.
Costs and expenses decreased 0.9% year over year to $67.4 million in the quarter.
Selling and promotional or S&P expenses, as a percentage of revenues, rose to 20.4% from 19.6% in the prior-year quarter.
Financials
As on Mar 31, 2017, total cash and cash equivalents were approximately $147.8 million, compared with $120.0 million as of Mar 31, 2016. Capital expenditures were approximately $1.7 million as of Mar 31, 2017, compared with $3.1 million in the prior-year period.
Second-Quarter 2017 Outlook
American Public Education anticipates consolidated revenues to decline approximately 10%–7% year over year.
The company expects earnings in the range of $0.19 to $0.24 per share.
At APUS, net course registrations by new students are expected to decrease between 11% and 7% on a year-over-year basis. Net course registrations are likely to decline between 9% and 6%.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
American Public Education, Inc. Price and Consensus
At this time, American Public's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum 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 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank 4 (Sell). We are expecting a below average return from the stock in the next few months.
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American Public (APEI) Down 10.4% Since Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for American Public Education, Inc. (APEI - Free Report) . Shares have lost about 10.4% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? 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 Education Misses on Q1 Earnings
American Public Education reported first-quarter adjusted earnings per share of $0.28, which missed the Zacks Consensus Estimate of $0.29 by 3.5%. Adjusted earnings also dropped 56.3% year over year due to declining revenues.
Revenues and Enrollment
Total revenue of $75.7 million surpassed the Zacks Consensus Estimate of $74.5 million by 1.6%. Revenues, however, decreased 9.9% year over year owing to declining revenues at both American Public University System and Hondros College of Nursing.
The company operates in two segments – American Public Education Segment (APEI - Free Report) and Hondros College, Nursing Programs (HCN).
APEI segment revenues dropped 10.7% to $68.1 million from $76.3 million in the prior-year quarter due to a 9% decrease in net course registrations.
Net course registrations declined on a 26% decrease in net course registrations by new students using Federal Student Aid (FSA) and an 18% fall in military tuition assistance (TA).
The downside at FSA may be attributed to the company’s efforts to improve its quality mix of students, adjustments to its marketing efforts and increasing competition for online students. The decline in Net course registrations using TA is largely due to changes in the TA program by the Department of Defense.
Completion rates of undergraduate students using FSA at APUS increased approximately 19% year over year.
New student enrollments using veteran benefits slipped 13%, while enrollment of students using cash and other sources increased 8%, both on a year-over-year basis.
HCN revenues fell 1.8% to $7.6 million from the prior-year quarter owing to lower enrollments.
Total enrollment at the Hondros College Nursing Programs declined 8% year over year to 1,710 students, while new student enrollment increased 22% year over year.
Inside the Headline Numbers
Income from operations before interest income and income taxes was $8.3 million, compared with $16.0 million in the prior-year quarter.
Costs and expenses decreased 0.9% year over year to $67.4 million in the quarter.
Selling and promotional or S&P expenses, as a percentage of revenues, rose to 20.4% from 19.6% in the prior-year quarter.
Financials
As on Mar 31, 2017, total cash and cash equivalents were approximately $147.8 million, compared with $120.0 million as of Mar 31, 2016. Capital expenditures were approximately $1.7 million as of Mar 31, 2017, compared with $3.1 million in the prior-year period.
Second-Quarter 2017 Outlook
American Public Education anticipates consolidated revenues to decline approximately 10%–7% year over year.
The company expects earnings in the range of $0.19 to $0.24 per share.
At APUS, net course registrations by new students are expected to decrease between 11% and 7% on a year-over-year basis. Net course registrations are likely to decline between 9% and 6%.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
American Public Education, Inc. Price and Consensus
American Public Education, Inc. Price and Consensus | American Public Education, Inc. Quote
VGM Scores
At this time, American Public's stock has a great Growth Score of 'A', though it is lagging a lot on the momentum 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 'A'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
The stock has a Zacks Rank 4 (Sell). We are expecting a below average return from the stock in the next few months.