One of the leading private education service providers in the
Apollo Group Inc.
) recently touched a 52-week low of $17.81 on Feb 25, 2013
following the recent cut in its fiscal 2013 revenue and profit
Factors Hurting Apollo Group
Estimates for this leading homebuilder have been going down
significantly after the release of its first quarter 2013 results
on Jan 09.
At its first quarter 2013 conference call, Apollo narrowed its
fiscal 2013 top-line guidance despite beating the top and bottom
line estimates in the quarter.
Apollo narrowed its previously provided fiscal 2013 net revenue
guidance to a range of $3.65 to $3.75 billion from prior
expectations of $3.65 to $3.80 billion. The revenue guidance was
trimmed as new enrollment trends in the month of December were
below expectations and deteriorated more than the first quarter
level. It is worth noting that this quarter is seasonally the
weakest for Apollo in terms of revenue growth due to holiday
Revenue per student is expected to range from negative 1% to 2%
for the remainder of fiscal 2013 as Apollo plans to offer higher
discounts in the year. In the second quarter, the company expects
revenues to be hit by about $25 million as discounts increase.
Discounts are expected to increase as a percentage of revenues to
roughly 10% in the second quarter and then come down to 8% for
the full year 2013. Moreover, though improving lately, new
enrollments are expected to become positive only by the end of
Adjusted operating income guidance was also reduced to a range of
$500.0 to $550.0 million from the prior guidance of $525 to $575
million for fiscal 2013. Expected increase in advertising
expenses in the second quarter may have called for the cut in
operating income guidance.
Apollo carries a Zacks Rank #3 (Hold).
Education companies that currently appear to be better
positioned than Apollo Group include
American Public Education Inc.
) with a Zacks Rank #1 (Strong Buy) and
) ) and
Grand Canyon Education, Inc.
) both with a Zacks Rank #2 (Buy).
AMER PUB EDUCAT (APEI): Free Stock Analysis
APOLLO GROUP (APOL): Free Stock Analysis
DEVRY INC (DV): Free Stock Analysis Report
GRAND CANYON ED (LOPE): Free Stock Analysis
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