William Blair analyst Stephen Sheldon has maintained their bullish stance on APEI stock, giving a Buy rating yesterday.
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Stephen Sheldon has given his Buy rating due to a combination of factors including American Public Education’s strong financial performance and promising future outlook. The company surpassed its revenue and profit expectations, with a notable year-over-year revenue increase of 7%, reaching $163 million. This exceeded both the company’s guidance and market consensus. The growth was driven by impressive performances across its educational units, particularly at APUS, Rasmussen, and Hondros, despite a significant decline at Graduate School USA due to its sale.
Furthermore, the company’s adjusted EBITDA rose by 60% year-over-year, significantly beating estimates, and the free cash flow trends remained positive. Although the government shutdown posed challenges, its impact was less severe than anticipated, thanks to military branches utilizing alternative funding solutions. This resilience, coupled with the company’s updated guidance and upcoming investor day, strengthens the conviction in its growth trajectory, justifying the Buy rating.
In another report released yesterday, Lake Street also maintained a Buy rating on the stock with a $38.00 price target.