American Public Education (APEI) AI Stock Analysis

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American Public Education

(NASDAQ:APEI)

Rating:69Neutral

Price Target:

$32.00

▲( 9.18% Upside)

APEI's overall stock score is primarily driven by its strong earnings call performance and technical indicators showing bullish momentum. Financial performance is solid but has areas needing improvement, while valuation concerns slightly detract from the score. Positive earnings guidance and improved operational metrics are the most significant factors.

Positive Factors

Earnings

American Public Education reported results that topped expectations and full-year earnings guidance.

Profitability

Management reaffirmed existing revenue guidance and increased expectations for profit.

Stock Valuation

APEI is trading at a discount compared to its peers, indicating potential value.

Negative Factors

Regulatory Uncertainty

The guidance includes conservative assumptions for GSUSA given changing federal priorities around learning and development.

Revenue Decline

Revenue declined by 12% at Graduate School USA.

American Public Education (APEI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$528.74M

Dividend YieldN/A

Average Volume (3M)198.07K

Price to Earnings (P/E)29.1

Beta (1Y)0.76

Revenue Growth4.86%

EPS GrowthN/A

CountryUS

Employees2,493

SectorConsumer Defensive

Sector Strength73

IndustryEducation & Training Services

Share Statistics

EPS (TTM)0.55

Shares Outstanding18,039,665

10 Day Avg. Volume291,779

30 Day Avg. Volume198,071

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)1.31

Price to Sales (P/S)0.00

P/FCF Ratio14.56

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$33.00

Price Target Upside12.59% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

American Public Education Business Overview & Revenue Model

Company DescriptionAmerican Public Education, Inc. (APEI) is a provider of online and on-campus postsecondary education. The company operates through several segments, including American Public University System (APUS) and Hondros College of Nursing. APUS offers a range of degree and certificate programs primarily serving military and public service communities, while Hondros College focuses on nursing education. APEI is committed to providing accessible, affordable, and high-quality education to its students.

How the Company Makes MoneyAPEI generates revenue primarily through tuition fees paid by students enrolled in its educational programs. The company benefits from its diverse program offerings across different segments, catering to a wide range of students, including military personnel, public service professionals, and aspiring nurses. Additionally, APEI may receive funding through financial aid programs and partnerships with government agencies or military organizations, which help support students' education costs. The company's business model focuses on maintaining a robust online platform and offering flexible learning options to attract and retain students.

American Public Education Financial Statement Overview

Summary

American Public Education demonstrated improved profitability and financial stability in 2024, with positive net income and a strong equity base. The company faces challenges in sustaining revenue growth and enhancing operational efficiency, as indicated by low EBITDA margins. Cash flow generation remains a strength, supporting operational and financial resilience.

Income Statement

Positive

American Public Education showed a notable improvement in profitability for 2024, with a turnaround in EBIT and net income, leading to positive net profit and EBIT margins. However, revenue growth was modest at 4.0%, and the EBITDA margin remains low, indicating potential challenges in operational efficiency.

Balance Sheet

Positive

The company's balance sheet reflects a healthy equity position with an equity ratio of 53.3%. The debt-to-equity ratio improved due to reduced total debt, enhancing financial stability. However, the return on equity is low at 5.3%, suggesting limited profitability relative to shareholders' equity.

Cash Flow

Positive

APEI's cash flow statement shows positive free cash flow and an increase in free cash flow growth rate by -12.1% from the prior year. The operating cash flow to net income ratio indicates strong cash generation relative to net income, though the free cash flow to net income ratio is modest, signaling room for improvement.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
624.56M	600.54M	606.33M	418.80M	321.79M
	Gross Profit
328.86M	307.68M	317.86M	246.18M	199.62M
	EBIT
33.07M	-48.31M	154.98M	32.94M	26.46M
	EBITDA
52.37M	-20.49M	-101.39M	50.77M	38.59M
	Net Income Common Stockholders
16.11M	-47.29M	-114.97M	17.75M	18.82M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
158.94M	116.66M	102.56M	122.63M	227.69M
	Total Assets
570.10M	557.39M	615.06M	725.61M	371.02M
	Total Debt
107.20M	204.73M	208.97M	243.71M	8.85M
	Net Debt
-51.74M	88.07M	106.41M	121.09M	-218.84M
	Total Liabilities
266.22M	265.41M	265.33M	310.00M	64.09M
	Stockholders Equity
303.88M	291.98M	349.73M	415.61M	306.93M
Cash Flow		Free Cash Flow
27.79M	31.62M	12.83M	4.44M	39.88M
	Operating Cash Flow
48.87M	45.51M	29.21M	16.27M	44.81M
	Investing Cash Flow
-21.08M	-13.77M	-13.67M	-336.67M	-4.16M
	Financing Cash Flow
-13.19M	-16.86M	-35.71M	242.34M	-15.71M

American Public Education Technical Analysis

Technical Analysis Sentiment

Positive

Last Price29.31

Price Trends

50DMA

24.24

Positive

100DMA

22.85

Positive

200DMA

19.77

Positive

Market Momentum

MACD

1.41

Negative

RSI

67.16

Neutral

STOCH

70.36

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APEI, the sentiment is Positive. The current price of 29.31 is above the 20-day moving average (MA) of 26.28, above the 50-day MA of 24.24, and above the 200-day MA of 19.77, indicating a bullish trend. The MACD of 1.41 indicates Negative momentum. The RSI at 67.16 is Neutral, neither overbought nor oversold. The STOCH value of 70.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for APEI.

American Public Education Risk Analysis

American Public Education disclosed 68 risk factors in its most recent earnings report. American Public Education reported the most risks in the “Legal & Regulatory” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 3 New Risks

The planned combination of APUS, RU, and HCN may not be completed, or may not be completed on the terms currently contemplated, and if it is, the expected benefits may not be realized, any of which could have a material adverse impact on our business, financial condition, and results of operations. Q4, 2024

HLC could identify deficiencies during its mid-cycle comprehensive evaluation of APUS and take adverse action against APUS based on such deficiencies. Q4, 2024

Increased use of AI may present operational, reputational, legal, regulatory, and competitive risks and could result in additional costs, each of which could materially and adversely affect our business, financial condition, and results of operations. Q4, 2024

American Public Education Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LOPE	82 Outperform	$5.49B	24.30	29.85%	―	6.31%	11.24%
UTI	79 Outperform	$1.90B	33.74	21.81%	―	14.69%	188.00%
PRDO	77 Outperform	$2.03B	13.72	16.54%	1.63%	6.35%	0.35%
STRA	73 Outperform	$2.11B	18.73	6.86%	2.74%	5.72%	11.02%
APEI	69 Neutral	$528.74M	29.10	8.18%	―	4.86%	―
Sector *	64 Neutral	$8.82B	14.56	4.78%	173.92%	3.50%	2.20%
LINC	60 Neutral	$676.72M	55.33	7.04%	―	15.24%	-54.31%

* Consumer Defensive Sector Average

Performance Comparison

APEI

American Public Education

29.31

11.28

62.56%

PRDO

Perdoceo Education

31.03

7.89

34.10%

LOPE

Grand Canyon Education

194.17

49.33

34.06%

LINC

Lincoln Edu

22.02

10.15

85.51%

STRA

Strategic Education

87.48

-22.68

-20.59%

UTI

Universal Technical Institute

34.99

18.64

114.01%

American Public Education Earnings Call Summary

Earnings Call Date:May 12, 2025

(Q1-2025)

% Change Since: 12.56%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Positive

The earnings call reflected a strong financial and operational performance, particularly in terms of revenue growth, enrollment increases at Rasmussen and Hondros, and improved margins. However, challenges remain with the Graduate School USA's performance and expected Q2 net loss due to specific financial adjustments.

Q1-2025 Updates

Positive Updates

Positive Enrollment Growth

Rasmussen enrollment increased 7% in Q1 2025 and 8% in Q2 2025, marking the fourth consecutive quarter of year-over-year enrollment increases. Hondros also reported a 9.6% growth in Q1 2025 enrollment with Q2 continuing the positive trend at 13.5% year-over-year.

Improved Financial Performance

APEI reported a revenue increase of 6.6% to $164.6 million and a nearly 25% increase in adjusted EBITDA. Adjusted EBITDA margin expanded by nearly 200 basis points to 12.9% from 11% in Q1 2024.

Increased EBITDA and Revenue Guidance

APEI raised its full year adjusted EBITDA guidance by $2 million to a range of $77 million to $87 million, and net income guidance to be between $23 million and $30 million.

Successful Cost Management

APEI is improving operating leverage through increased enrollment and disciplined cost management, highlighted by a plan to redeem preferred shares saving approximately $6 million in dividend expense annually.

Strong Cash Flow

First quarter cash flow from operations was $37 million, up from $20.7 million in the prior year, with total cash, cash equivalents, and restricted cash increasing by $28.6 million since year-end 2024.

Negative Updates

Challenges at Graduate School USA

Due to government initiatives and budget uncertainties, Graduate School USA's revenue declined to $3.7 million from $4.2 million in the prior year, with an EBITDA loss of $2.1 million compared to a $1.1 million loss previously.

Q2 Net Loss Expectation

APEI projects a Q2 2025 net loss available to common shareholders between $2.5 million and $0.7 million, influenced by a $2.9 million redemption premium and $1.7 million in combination-related costs.

Hondros EBITDA Performance

Despite a revenue increase, Hondros reported an EBITDA loss of $0.2 million in Q1 2025, attributed to a mix shift towards shorter-duration LPN programs requiring frequent enrollment cycles.

Company Guidance

During the American Public Education Inc. (APEI) first quarter 2025 earnings call, the company reported substantial improvements in its financial metrics, exceeding its guidance for revenue, adjusted EBITDA, adjusted EBITDA margin, and net income. Revenue grew by 6.6% to $164.6 million, and adjusted EBITDA increased by nearly 25%, expanding the margin by about 200 basis points to 12.9%. Net income to common shareholders rose to $7.5 million from a $1 million loss in the previous year’s first quarter. Rasmussen, a key institution within APEI, showed significant progress with an 8% year-over-year enrollment increase, contributing a positive adjusted EBITDA swing from a $2.6 million loss to a $2.4 million gain. This growth in enrollments, particularly in campus-based nursing, alongside effective cost management, were highlighted as vital contributors to the enhanced financial performance. The company also raised its full-year adjusted EBITDA guidance by $2 million to a range of $77 million to $87 million and maintained its revenue forecast between $650 million and $660 million.

American Public Education Corporate Events

M&A TransactionsBusiness Operations and StrategyRegulatory Filings and Compliance

American Public Education to Consolidate Institutions

Positive

Jan 28, 2025

On January 28, 2025, American Public Education, Inc. announced plans to consolidate its institutions—American Public University System, Rasmussen University, and Hondros College of Nursing—into a single entity named American Public University System. This combination aims to enhance the company’s healthcare platform, strengthen its military and veteran focus, and improve long-term sustainability. The consolidation is anticipated to close in the third quarter of 2025, subject to regulatory approval, and is expected to simplify operations, boost student outcomes, and fortify financial stability. Additionally, the company confirmed compliance with the Department of Education’s 90/10 Rule for 2024, indicating a balanced revenue stream less reliant on federal financial aid.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.