American Public Education Inc. Slumps 3% in November
- By Jacob Maslow
American Public Education Inc. (APEI), an education company, fell more than 3% in November, from $32.64 a share to $31.52 a share. Year to date, the company's stock is up over 22%, but headwinds have caused it to fall 27.46% between Aug. 8 and the end of November.
The company's earnings per share have fallen 17%, on average, over the last three years. Slow growth has investors questioning the company's CEO, Wally Boston, who has been at the helm since 2004. Boston's performance over the past three years has come into question, but returns on the company's shares have been 49% over that period.
Warning! GuruFocus has detected 3 Warning Signs with APEI. Click here to check it out.
The intrinsic value of APEI
Shareholder returns remain strong despite the company's earnings per share lagging behind. The stock was impacted, early in November, when the company released its most recent earnings report.
Third-quarter 2018 results show that net income rose 26% in the last quarter to $5.5 million, compared to $4.4 million the year prior. Earnings per diluted share were 33 cents, up from 27 cents during the same period a year prior.
The company's shares are under pressure, as the American Public University System (APUS) net course registration remained flat in the third quarter. New student registration fell 3% year-over-year in the third quarter on increased competition, certifications and courses from other institutes.
Consolidated revenue decreased from $73.3 million to $73 million, a less than 1% decline from the year prior.
Enrollment at Hondros College of Nursing, a subsidiary, rose 11% year-over-year to 1,980 students, but new enrollment still declined 3% compared to the same period a year prior.
Lack of new student enrollment remains a problem for American Public Education and will lead to long-term concerns as more students graduate.
Expectations for the fourth quarter suggest that the company's revenue will fall 0% to 4% year-over-year. New student enrollment is expected to fall by as much as 5% in the fourth quarter for APUS.
New enrollments at Hondros College is expected to fall by 4% in the final quarter of the year.
Higher revenue and earnings in the third-quarter are not enough to mask the company's enrollment declines, which will weigh on the company's future earnings. Until American Public Education is able to turn its enrollment figures around, the company's long-term investment value will remain in question.
Disclosure: The author does not have any stake in the listed equities.
This article first appeared on GuruFocus.
Warning! GuruFocus has detected 3 Warning Signs with APEI. Click here to check it out.
The intrinsic value of APEI
