William Blair analyst Stephen Sheldon has maintained their bullish stance on APEI stock, giving a Buy rating on October 27.
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Stephen Sheldon has given his Buy rating due to a combination of factors, despite the short-term challenges faced by American Public Education (APEI) due to the government shutdown. He acknowledges that the company is experiencing a temporary decline in course registrations, particularly affecting the American Public University System (APUS), which has seen a significant drop due to the suspension of tuition assistance programs for military personnel and veterans. However, Sheldon is optimistic about a swift recovery in registrations once the government reopens, drawing parallels to a similar situation in 2013 where a quick rebound was observed.
Furthermore, while the immediate impact includes a reduction in revenue and adjusted EBITDA estimates for the fourth quarter, Sheldon believes that APEI’s ability to manage expenses will help mitigate profit impacts. He also notes that the long-term growth prospects remain intact, with minimal expected impact on 2026 trends if the shutdown is resolved soon. This combination of a temporary setback with a strong potential for recovery underpins his Buy rating for APEI.
In another report released on October 27, Lake Street also maintained a Buy rating on the stock with a $38.00 price target.