Factors to Note Ahead of American Public's Q4 Earnings Release

American Public Education, Inc. APEI is slated to report fourth-quarter 2024 results on March 6, after market close.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

In the last reported quarter, the company’s earnings per share (EPS) beat the Zacks Consensus Estimate by 300%, but revenues missed the same by 0.3%. On a year-over-year basis, revenues grew 1.5% and EPS rose 100%.

The company’s earnings topped the consensus mark in three of the trailing four quarters and met on one occasion, an average surprise being 181.4%.

American Public Education, Inc. Price and EPS Surprise

American Public Education, Inc. price-eps-surprise | American Public Education, Inc. Quote

How Are Estimates Placed for APEI Stock?

The Zacks Consensus Estimate for the fourth-quarter EPS has remained stable at 54 cents per share in the past 60 days. The estimated figure indicates a 15.6% decrease from the year-ago quarter’s EPS of 64 cents.

The consensus mark for revenues is pegged at $161.6 million, suggesting a 5.7% year-over-year rise.

What the Zacks Model Unveils for American Public

Enrollments & Revenues

American Public’s fourth-quarter revenues are likely to have increased from the previous year due to the solid performance across all its segments. The company has been witnessing strong enrollment at American Public University System segment or APUS (which accounted for 50.3% of third-quarter revenues) and Hondros College of Nursing segment or HCN (which accounted for 10.1% of third-quarter revenues), along with improvement at Rasmussen University or RU (which accounted for 34.4% of third-quarter revenues). Also, select tuition and fee increases, combined with the positive impact of cost reductions and realignments, added to growth.

APEI expects total revenues to increase 4-8% year over year to $159-$164 million.

APUS’ total net course registrations are likely to grow 4% to 6% year over year, driven by increased student registrations in military-affiliated programs. HCN’s total enrollment is expected to increase 19% from the prior-year figure to 3,700 students. RU’s student enrollment is expected to be up 4% from the year-ago quarter’s figure to 14,600. Within RU, On-ground student enrollment is likely to decline 3% to 6,300, while Online student enrollment is expected to rise 9% to 8,300 year over year.

For the fourth quarter, we expect revenues in the APUS and HCN segments to increase 2.8% to $81.6 million and 20.6% to $19 million, respectively, year over year. Our model predicts that the RU segment’s revenues will grow 5.4% to $55.4 million year over year.

Margins

The company is expected to witness lower earnings, mainly due to lower contributions from the GSUSA segment, which is still generating negative adjusted EBITDA. Also, tepidness in On-ground enrollment at the RU segment is an added headwind.

The company expects net income between $9 million and $11 million (compared with $11.5 million a year ago) or between 47 cents and 56 cents per share (compared with 64 cents a year ago). Adjusted EBITDA is expected to be between $23 million and $26 million in the fourth quarter of 2024 (compared with $25.7 million a year ago).

For the to-be-reported quarter, we expect adjusted EBITDA to grow 1.1% to $26 million and adjusted EBITDA margins to decline 70 basis points to 16.1% from a year ago.

What Our Quantitative Model Predicts for APEI Stock

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 #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

Strategic Education, Inc. STRA , or SEI, reported mixed results for the fourth quarter of 2024. Its adjusted earnings topped the Zacks Consensus Estimate, while revenues missed the same. On a year-over-year basis, the top line grew while the bottom line tumbled.

STRA’s quarter witnessed robust employer-affiliated enrollment, strong growth from Sophia Learning subscriptions and another quarter of total enrollment growth in the Australia/New Zealand segment. However, increased costs and expenses marred the bottom-line growth.

Adtalem Global Education Inc. ATGE posted better-than-expected results in second-quarter fiscal 2025. Earnings and revenues surpassed the respective Zacks Consensus Estimate and increased year over year, driven by strong enrollment growth and strategic initiatives.

Adtalem's operational excellence strategy, Growth with Purpose, has driven six consecutive quarters of enrollment growth while supporting its mission to develop skilled healthcare professionals. Furthermore, strong demand at Chamberlain University and Walden University drove results. ATGE now expects fiscal 2025 adjusted earnings to be in the band of $6.10-$6.30 per share compared with the earlier prediction of $5.75-$5.95.

Stride, Inc.’s LRN second-quarter fiscal 2025 earnings and revenues surpassed the Zacks Consensus Estimate and showed year-over-year growth.

Following its stronger-than-expected quarterly results, Stride raised its fiscal 2025 outlook, projecting year-over-year growth in both revenues and adjusted operating income. It now anticipates full-year revenues to be between $2.32 billion and $2.355 billion (indicating 13.7-15.4% year-over-year growth), an increase from the prior forecast of $2.225-$2.30 billion. Additionally, adjusted operating income is expected to be in the range of $430-$450 million (depicting 46.3-53.1% year-over-year growth) compared with the previous estimate of $395-$425 million.

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This article originally published on Zacks Investment Research (zacks.com).

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