American Public Education, Inc. APEI is slated to report fourth-quarter 2023 results on Mar 5, after market close.
In the fourth quarter, the company’s top and bottom lines surpassed the Zacks Consensus Estimate by 108% and 1.1%, respectively. On a year-over-year basis, revenues decreased 1.6%. APEI reported an adjusted loss of 6 cents per share in the year-ago quarter.
The company’s earnings topped the consensus mark in three of the trailing four quarters and missed on one occasion, an average surprise being 23.2%.
Trend in Estimate Revision
The Zacks Consensus Estimate for the fourth-quarter earnings has remained stable at 14 cents per share in the past 60 days. The estimated figure indicates a 151.9% increase from the year-ago quarter’s loss of 27 cents per share.
American Public Education, Inc. Price and EPS Surprise
American Public Education, Inc. Price and EPS Surprise
American Public Education, Inc. price-eps-surprise | American Public Education, Inc. Quote
The consensus mark for revenues is $150.54 million, suggesting a 1.2% year-over-year decline.
Factors to Note
Enrollments & Revenues
American Public’s fourth-quarter revenues are likely to have declined slightly due to a year-over-year lower contribution from Rasmussen University or the RU segment (which accounted for 34.5% of total third-quarter 2023 revenues). The decline is likely to have stemmed from restricted admission policies and enrollment caps in Illinois and the Twin Cities.
APEI expects total revenues between -2% and -1% year over year, or $149.3 million and $151.3 million, in the fourth quarter. The company expects student enrollment in the RU segment to decline 10% year over year to approximately 14,100 students. Nursing student enrollment is likely to decline 25% to 5,700.
For the quarter, our model predicts the RU segment’s revenues will decline 12.5% to $53.1 million year over year.
Nonetheless, non-nursing student enrollment is expected to increase 5% to 8,400 year over year.
The aforementioned headwinds of the fourth-quarter revenues are likely to have been offset by higher net course registrations in American Public University System segment or APUS (which accounted for 50.7% of total third-quarter 2023 revenues) and increased total enrollment in the Hondros College of Nursing segment or HCN (which accounted for 9.1% of total third-quarter 2023 revenues), year over year.
The company expects the APUS segment’s total net course registrations to be 88,900-90,700, reflecting growth of 2-4% year over year. HCN segment’s total enrollment is expected to increase 19% from the prior year’s figure to an all-time high of 3,100 students.
For the fourth quarter, we expect revenues in the APUS and HCN segments to increase 4.9% to $77 million and 23.6% to $15.6 million, respectively, year over year.
Margins
The company is expected to witness strong earnings, most likely on operational improvements. Also, modest tuition increases combined with increased focus on marketing spend and other costs are added positives.
The company anticipates adjusted earnings of 7-15 cents per share in the fourth quarter. Adjusted EBITDA is expected to be in the range of $14.9-$16.9 million, suggesting a decline of 3% to growth of 10% year over year.
For the to-be-reported quarter, we expect adjusted EBITDA margins to rise 350 basis points to 8.5% year over year.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for American Public this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: American Public currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer Releases
Universal Technical Institute, Inc. UTI reported impressive first-quarter fiscal 2024 results. Quarterly earnings and revenues surpassed the Zacks Consensus Estimate. On a year-over-year basis, the top and bottom lines increased impressively.
The company outperformed its financial expectations in the first quarter, advancing its growth, diversification and optimization strategy. It reported strong year-over-year new student start growth in the UTI and Concorde segments. The firm made progress with launching and ramping up new programs. The company is optimistic about its fiscal 2024 performance with a solid multi-divisional foundation and ability to deliver on expectations.
Adtalem Global Education Inc. ATGE reported impressive results for second-quarter fiscal 2024. Earnings and revenues surpassed the respective Zacks Consensus Estimate and increased year over year.
The company’s quarterly results reflect solid enrollment growth along with the efficient execution of its Growth with Purpose strategy. The continuous focus on this growth strategy sparked organic revenue growth, improved operational efficiencies and yielded outstanding academic outcomes. Owing to the quarter’s uptrend, ATGE raised its fiscal 2024 guidance.
Strategic Education, Inc., or SEI STRA, reported impressive results for fourth-quarter 2023. Its quarterly earnings and revenues topped the Zacks Consensus Estimate and increased year over year.
Growth across its three segments, led by continued enrollment growth in the U.S. Higher Education, was driven significantly by employer-affiliated enrollment, strong growth in the Education Technology Services (earlier known as Alternative Learning) and improving performance in Australia/New Zealand, which drove the result.
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