On January 12, Zacks Investment Research upgraded
American Public Education, Inc.
) to a Zacks Rank #1 (Strong Buy) following back-to-back solid
earnings results in the second and third quarters of 2012.
Why the Upgrade?
Third quarter 2012 earnings of 60 cents per share beat both
the Zacks Consensus Estimate and prior-year quarter's adjusted
earnings of 50 cents by 20%. Cost savings, banking on the
company's strategic initiatives, made up for the modest revenue
growth and led to the earnings beat. Total revenue increased 18%
year on year to $77.1 million. The rate of increase was within
management's expectation of growth in the range of 16% to 19%.
Revenues slivered past the Zacks Consensus Estimate of $77.0
million. Total and new enrollment growth was also within
American Public has been consistently delivering positive
growth in revenues, earnings and enrollments. It has delivered a
positive earnings surprise in the past four quarters with an
average of 13.4%. This is impressive, as on the other hand most
of its peers like
) have been witnessing consistent enrollment declines.
We believe that the company's affordable tuition costs and its
shifting of student focus to the civilian market are boosting
enrollment growth. Moreover, its corporate and community college
partnerships provide the necessary diversification from volatile
enrollment trends of active duty military students. The company
is also improving its international opportunities. In addition,
the company's fraud prevention initiatives to improve student
quality augur well for better student outcome and retention.
AMER PUB EDUCAT (APEI): Free Stock Analysis
APOLLO GROUP (APOL): Free Stock Analysis
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