American Public (APEI) Posts Q3 Loss, Expects Tepid Enrollment
American Public Education, Inc. APEI reported a loss for third-quarter 2021. Revenues, however, beat the Zacks Consensus Estimate and increased on a year-over-year basis.
American Public’s shares fell 3.5% in the after-hours trading session on Nov 8, following tepid results.
Delving Deeper
The company reported a loss of 1 cent per share for the third quarter due to higher acquisition costs and interest expenses. In the year-ago period, it reported adjusted earnings of 18 cents per share.
American Public Education, Inc. Price, Consensus and EPS Surprise
American Public Education, Inc. price-consensus-eps-surprise-chart | American Public Education, Inc. Quote
Total revenues of $98.2 million topped the consensus mark of $96 million by 2.5% and increased 24% from the year-ago period. The upside was backed by the acquisition of Rasmussen University (RU). The company completed the buyout on Sep 1, 2021.
For the quarter, total costs and expenses increased 28% year over year to $97 million due to the inclusion of RU, which was negatively impacted owing to the timing of the transaction’s closure. Adjusted EBITDA decreased 15.7% year over year to $9.1 million.
Segment Discussion
The company now operates within three segments, namely, American Public University System’s (“APUS”), RU and Hondros College of Nursing segment (HCN).
APUS: Revenues of $65.9 million declined 5.4% from the year-ago period. APUS’s total net course registration slipped 8% from the year-ago period to 83,100 for the third quarter.
RU: The segment reported revenues of $21.1 million for the quarter. RU’s total student enrollment also fell 2% from the prior-year quarter to 16,900.
HCN: Segment’s revenues rose 17.8% year over year to $11.2 million owing to improved enrollments. Total student enrollment at HCN increased 19% from the prior-year quarter to 2,320.
Financials
At September-end, American Public had total cash and cash equivalents of $141.5 million compared with $227.7 million at 2020-end.
Fourth-Quarter Guidance
The company expects total revenues to increase 75-80% year over year. The Zacks Consensus Estimate for the metric is pegged at $85.49 million, indicating growth of 8% year over year. It anticipates the bottom line within 31-38 cents per share, indicating a decline of 19-34% from the year-ago reported earnings of 18 cents. Adjusted EBITDA is anticipated within $23.8-$26.3 million, suggesting a rise of 50-66% year over year.
At APUS, total net course registrations are likely to decline 2-5% year over year to 84,000-86,600. HCN’s total student enrollment is expected to grow more than 2,510 or 17% from the prior year. RU’s student enrollment is likely to fall 3.5% from the year-ago quarter (an 8% rise in Nursing is expected to be offset by a 13% decline in Non-Nursing).
Zacks Rank & Key Picks
American Public — which shares space with PowerSchool Holdings, Inc. PWSC in the Zacks Schools industry — currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the same industry include Laureate Education, Inc. LAUR and Lincoln Educational Services Corporation LINC, each carrying Zacks Rank #2 (Buy). Laureate and Lincoln’s earnings for the current year are expected to rise 45.7% and 136.1%, respectively.
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