Why Is American Public Education (APEI) Up 13.4% Since Its Last Earnings Report?
A month has gone by since the last earnings report for American Public Education, Inc. APEI. Shares have added about 13.4% in that time frame.
Will the recent positive trend continue leading up to its next earnings release, or is APEI due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
American Public Education Beats Q1 Earnings Estimates
American Public Education reported first-quarter 2018 earnings per share of 35 cents, beating the Zacks Consensus Estimate of 34 cents. Adjusted earnings in the year-ago quarter were 28 cents.
Revenues and Enrollment
Total revenues of $75 million met the Zacks Consensus Estimate. Also, revenues fell 1% year over year, thanks to lower contribution from the American Public Education segment (“APEI”).
The company operates through two segments — American Public Education segment and Hondros College, Nursing Programs (“HCN”).
APEI primarily includes operations of American Military University and American Public University. Together, they are referred to as American Public University System (“APUS”).
Revenues declined 3.6% to $65.7 million due to a fall in net course registrations.
During the quarter, total net course registration at APUS declined 4% year over year and net course registrations by new students fell 11%. Student enrollment at APUS declined 5% year over year as of Mar 31, 2018.
Hondros College of Nursing revenues rose to $9.3 million in the first quarter compared with $7.6 million in the prior-year quarter owing to higher new enrollments.
Total enrollment in the Hondros College Nursing Programs increased 19% year over year to 2,040 students and new student enrollment rose 11% year over year.
Inside the Headline Numbers
Income from operations before interest income and income taxes was $6.2 million compared with $8.3 million in the prior-year quarter.
Total costs and expenses increased 2.1% year over year to $68.8 million in the quarter.
Financials
As of Mar 31, 2018, total cash and cash equivalents were approximately $186.2 million, compared with $179.2 million as of Dec 31, 2017. Capital expenditures were approximately $1.4 million in 2017, down from $1.7 million a year ago.
Q2 Guidance
Total revenues are expected to remain flat or rise up to 2% year over year.
The company expects earnings in the range of 29-34 cents per share.
At APUS, net course registrations by new students are expected to decline 8-3% on a year-over-year basis. Net course registrations are likely to be between a 2% decrease and a 2% increase year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. There have been three revisions higher for the current quarter.
American Public Education, Inc. Price and Consensus
American Public Education, Inc. Price and Consensus | American Public Education, Inc. Quote
VGM Scores
At this time, APEI has an average Growth Score of C. Its Momentum is doing a lot better with an A. The stock was allocated a grade of B on the value side, putting it in the top 40% 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.
Based on our scores, the stock is primarily suitable for momentum investors while also being suitable for those looking for value and to a lesser degree growth.
Outlook
Estimates have been trending upward for the stock and the magnitude of these revisions looks promising. It comes with little surprise APEI has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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