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American Public (APEI)-Rio Salado Tie Up Over Online Education

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Zacks Equity Research
·4 min read
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American Public Education, Inc’s. APEI wholly-owned subsidiary American Public University System (“APUS”) has collaborated with Rio Salado College to provide an online associate degree in selected online baccalaureate programs.

APUS and Rio Salado aim to promote positive student outcomes through high-quality programs and make distance education affordable and accessible.

Rationale of the Program

Both APUS and Rio Salado have a diversified portfolio of students which comprises service holders like active military men, veterans and college students. According to the Lumina Foundation, there is a continuing shift in the demographic characteristics of college students. The study reports that around 64% of students are involved in jobs while attending schools. Also, about 24% of the students have children or people dependent on them. Moreover, since the coronavirus outbreak, online classes have become the cornerstone of modern higher education and will continue to better the options for higher studies.

Also, federal data shows that American workers with associate degrees earned a median wage of $54,940 or $17,000 more than those with a high school degree, according to the 2019 U.S. Bureau of Labor statistics. Also, per the data, workers with bachelor's degree earned a median wage of $75,440 in 2019.

APUS and Rio Salado are both regionally-recognized organizations and lead the market in online education, with evident achievements in helping students finish the transfer procedure and obtain associate and bachelor's degrees. Rio Salado has served more than 250,000 students online for more than 20 years. APUS, which has more than 103,000 alumni, provides more than 200 distinct online degree and certificate courses along with budget-friendly tuition, monthly new batch initiation and a scholar-practitioner group of educators.

The programs welcome students across United States and intend to expand access to baccalaureate education. Students pursuing additional education will find new options with chances to expand their career or grow professionally within their current fields of study.

Our Takes

Shares of American Public have gained 18.8% in the past year, compared with the Zacks Schools industry’s 6.5% growth. The company has undertaken several initiatives to improve enrolment trends and student persistence rate. It has been benefiting from increased demand for online courses and nursing programs.



Notably, the company expects to register revenue growth of 10-14% in the fourth quarter. Also, it projects APUS’ net course registrations by new students to increase 11-15% year over year. Total net course registrations are expected to rise 6-10% year over year.

American Public continued to be a leader in affordability and value. Per the 2019 study by Georgetown University Center of Education, APUS comes within the top 2% of the total U.S. colleges in terms of delivering value, meaning net present value of future earnings and affordability. In 2019, tuition at APUS remained among the lowest in the four-year for-profit industry’s history.

Zacks Rank & Key Picks

American Public currently carries a Zacks Rank #4 (Sell).

Some of the better-ranked stocks in the same industry are Afya Limited AFYA, Adtalem Global Education Inc. ATGE and Vitru Limited VTRU. Afya currently sports a Zacks Rank #1 (Strong Buy), the other two stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Afya has an expected earnings growth rate of 44 % for 2021.

Adtalem Global Education’s fiscal 2021 earnings are expected to grow 28.1%.

Vitru has an expected earnings growth rate of 13.1% for 2021.

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American Public Education, Inc. (APEI) : Free Stock Analysis Report

Adtalem Global Education Inc. (ATGE) : Free Stock Analysis Report

Afya Limited (AFYA) : Free Stock Analysis Report

Vitru Limited (VTRU) : Free Stock Analysis Report

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