We expect higher education provider,
American Public Education, Inc.
) to beat expectations when it reports the first-quarter 2013
results on May 9.
Why a Likely Positive Surprise?
Our proven model shows that American Public is likely to beat
earnings because it has the right combination of two key
Positive Zacks ESP:
Earnings Surprise Prediction or ESP, which represents the
difference between the Most Accurate estimate and the Zacks
Consensus Estimate, is at 1.75%. This is very meaningful and a
leading indicator of a likely positive earnings surprise for
Zacks #3 Rank (Neutral):
American Public carries a Zacks Rank #3 (Hold).Note that stocks
with Zacks Ranks of #1, #2 and #3 have a significantly higher
chance of beating earnings. The sell rated stocks (#4 and #5)
should never be considered going into an earnings
The combination of American Public's Zacks Rank #3 (Hold) and
+1.75% ESP makes us confident in looking for a positive earnings
beat on May 9th.
What is Driving the Better than Expected Earnings?
Strategic initiatives like ePress initiative, information and
technology upgrades, Title IV processing automation and lower
bad-debt expense are expected to lead to a positive earnings
surprise in the upcoming quarter, even though new student starts
are expected to decline. Moreover, the company intends to spend
less on traditional media advertising, which are relatively
expensive and easily attract fund abusers. This will further
lower operating costs.
The positive trend is seen in the trailing four-quarter
average surprise of almost 12.0%, which was greatly helped by the
10.5% positive surprise in the last-reported quarter. This was
possible because American Public did a good job of controlling
costs owing to its strategic initiatives. Top line growth and
brisk student enrollments also helped.
Other Stocks to Consider
American Public is not the only firm looking up this earnings
season. We also see likely earnings beats coming from these three
Giant Interactive Group, Inc.
), with an Earnings ESP of +4.76% and a Zacks Rank #2 (Buy)
Perion Network Ltd
), with an Earnings ESP of +8.57% and a Zacks Rank #2 (Buy)
), with an Earnings ESP of +4.35% and a Zacks Rank #3 (Hold)
AMER PUB EDUCAT (APEI): Free Stock Analysis
GIANT INTERACTV (GA): Free Stock Analysis
K12 INC (LRN): Free Stock Analysis Report
PERION NETWORK (PERI): Get Free Report
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