American Public Education Rises 11% On Higher 1Q Profit Forecast

Shares of American Public Education were up over 11% in Wednesday’s pre-market trading session after it announced better-than-expected 4Q results and forecasted 1Q profits that topped Street expectations.

American Public Education (APEI) reported a 27% year-on-year increase in 4Q earnings to $0.47 per share, which came in ahead of analysts’ estimates of $0.41 per share and were driven by top-line growth and higher income from operations.

Revenues of $85.9 million grew 15.4% year-over-year and beat the consensus estimate of $83.8 million. Top-line growth was driven by a 13.5% increase in APEI segment revenues and a 31.8% growth in HCN [Hondros College of Nursing] segment revenues, resulting from higher student enrolment in 4Q.

The company’s CEO Angela Selden said, “Our successful efforts to bring our value proposition to a wider audience have contributed to five consecutive quarters of net course registration growth at APUS [American Public University System] and record enrollment at Hondros.”

As for 1Q, American Public Education foresees earnings in the range of $0.39-$0.44 per share, much higher than the consensus estimates of $0.22. Furthermore, the company anticipates revenue growth of about 18% year-on-year in 1Q. (See American Public Education stock analysis on TipRanks)

On Feb. 2, Barrington analyst Alexander Paris maintained a Buy rating and a price target of $40 (43.7% upside potential) on the stock, “given increased demand for online higher education and nursing programs, combined with its discount valuation and prospective accretive acquisition of Rasmussen University.”

Overall, the Street has a Moderate Buy consensus rating on the stock based on 2 Buys and 1 Hold. The average analyst price target of $40.67 implies upside potential of 46.1% to current levels. Shares have gained approximately 21% over the past year.