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1. Company Snapshot

1.a. Company Description

American Public Education, Inc., together with its subsidiaries, provides online and campus-based postsecondary education.The company operates through three segments: American Public University System, Rasmussen University, and Hondros College of Nursing.It offers 130 degree programs and 111 certificate programs in various fields of study, including business administration, health science, technology, criminal justice, education, and liberal arts, as well as national security, military studies, intelligence, and homeland security.


The company also provides nursing-and health sciences-focused postsecondary education, diploma in practical nursing, an associate degree in nursing, and an associate degree in medical laboratory technology.American Public Education, Inc.was incorporated in 1991 and is headquartered in Charles Town, West Virginia.

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1.b. Last Insights on APEI

American Public Education's recent performance was driven by robust enrollment trends, particularly at APUS, which contributed to increased revenue and net income exceeding guidance. The company's operating leverage in the Rasmussen segment also played a significant role in its Q1 2025 financial results. Additionally, the company's strong earnings surprise history and positive earnings outlook suggest a continued upward trend. Furthermore, APUS's recent Great Place to Work certification highlights a positive work culture, which can lead to increased employee satisfaction and productivity.

1.c. Company Highlights

2. APEI's Q2 2025 Earnings: A Strong Performance

American Public Education, Inc. (APEI) reported a robust second-quarter 2025 earnings, with revenue reaching $162.8 million, a 6.5% increase from the prior year period. The company's net loss available to common shareholders narrowed to $0.3 million, compared to a net loss of $1.2 million in the prior year. Adjusted EBITDA was $15.1 million, a 38% increase from the prior year. The earnings per share (EPS) came in at -$0.02, beating estimates of -$0.07. The company's financial performance was also reflected in its updated full-year guidance, maintaining revenue guidance at $650-660 million and increasing adjusted EBITDA guidance to $81-88 million.

Publication Date: Aug -24

📋 Highlights
  • Revenue Growth:: Q2 revenue reached $162.8M, up 6.5% YoY.
  • Adjusted EBITDA Surge:: Increased by 38% YoY to $15.1M.
  • Enrollment Expansion:: Rasmussen and Hondros grew by 10% and 18%, respectively.
  • Full-Year Guidance Update:: Adjusted EBITDA raised to $81-88M; revenue maintained at $650-660M.
  • Military Funding Benefit:: $30M expected from 30% share of $100M active duty military education funding.

Operational Highlights

The company achieved several simplification milestones, including the sale of two corporate administrative buildings, the removal of restrictions on a $24.5 million letter of credit, and the redemption of preferred stock for $43.1 million. These actions improved the balance sheet and financial position. Enrollment growth continued, with Rasmussen and Hondros experiencing 10% and 18% growth, respectively. The company appointed James Kenigsberg as Interim Chief Innovation and Technology Officer to lead transformation efforts aimed at improving access and student persistence.

Segment Performance

In the quarter, APUS revenue increased 6.1%, and net course registrations increased 7.3%. Rasmussen revenue increased 12.2%, and Hondros revenue increased 10.5%. Graduate School, which was sold in July, reported a revenue decline. The company's robust portfolio of educational opportunities and streamlined marketing efforts are expected to drive future growth.

Valuation and Outlook

With a P/S Ratio of 0.86 and an EV/EBITDA of 9.3, the stock appears reasonably valued. Analysts estimate next year's revenue growth at 4.3%. The company's plans to invest in growth initiatives, including healthcare expansion and technology, and its consideration of tuck-in acquisitions, are expected to drive future growth. As Richard W. Sunderland mentioned, "Our universities offer high-quality, affordable degrees in in-demand fields like nursing, which leads to good outcomes." The company's ROE of 9.73% and ROIC of 6.59% indicate a decent return on equity and invested capital.

Future Prospects

The company is on track to consolidate its institutions by the end of the year, which will provide a more streamlined marketing approach and a broader course catalog for students. The consolidation of educational units into one platform is expected to provide revenue and cost synergies. The company will provide more precise numbers and expectations on this in an upcoming investor meeting. With the sale of Graduate School USA, the company has cleaned up its balance sheet and reiterated its revenue guidance.

3. NewsRoom

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American Public Q3 Earnings & Revenues Top Estimates, Both Rise Y/Y

Nov -11

Source: zacks.com

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American Public Education, Inc. to Host 2025 Investor Day on November 20, 2025 in New York City

Nov -11

Source: prnewswire.com

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American Public Education, Inc. (APEI) Q3 2025 Earnings Call Transcript

Nov -11

Source: seekingalpha.com

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American Public Education (APEI) Tops Q3 Earnings and Revenue Estimates

Nov -11

Source: zacks.com

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Compared to Estimates, American Public Education (APEI) Q3 Earnings: A Look at Key Metrics

Nov -11

Source: zacks.com

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American Public Education Reports Third Quarter 2025 Financial Results that Exceed Top End of Guidance

Nov -10

Source: prnewswire.com

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American Public Education to Report Q3 Earnings: Here's What to Know

Nov -07

Source: zacks.com

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Unlocking Q3 Potential of American Public Education (APEI): Exploring Wall Street Estimates for Key Metrics

Nov -06

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.18%)

6. Segments

American Public University System

Expected Growth: 3.5%

American Public University System's 3.5% growth is driven by increasing demand for online education, strategic partnerships with the military and government agencies, and expansion of degree programs in high-growth fields such as healthcare and technology. Additionally, the university's affordable tuition rates and strong student retention rates contribute to its steady growth.

Rasmussen University

Expected Growth: 2.8%

Rasmussen University's 2.8% growth is driven by increasing demand for online education, strategic partnerships with healthcare providers, and expansion of nursing and healthcare programs. Additionally, the university's focus on employer-driven curriculum and flexible learning options appeals to working professionals seeking career advancement.

Hondros College of Nursing

Expected Growth: 3.2%

Hondros College of Nursing's 3.2% growth is driven by increasing demand for nursing professionals, strategic partnerships with healthcare providers, and expansion of online programs. Additionally, American Public Education, Inc.'s strong brand reputation and effective marketing strategies contribute to the college's growth.

Corporate and Other

Expected Growth: 2.5%

American Public Education, Inc.'s Corporate and Other segment growth of 2.5% is driven by increasing demand for online education, strategic partnerships, and cost savings initiatives. Additionally, the company's focus on diversifying its revenue streams and investing in digital infrastructure has contributed to this growth.

7. Detailed Products

APEI eLibrary

A digital library that provides access to a vast collection of e-books, articles, and other educational resources

APEI Curriculum

A comprehensive curriculum design and development service that provides customized educational content

APEI Faculty Support

A faculty support service that provides training, resources, and mentorship to educators

APEI Student Services

A range of student support services, including academic advising, career counseling, and tutoring

APEI Institutional Solutions

A suite of solutions designed to help educational institutions improve operational efficiency, reduce costs, and enhance student outcomes

8. American Public Education, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is moderate in the American public education system, as there are alternative educational options available, such as private schools and online educational platforms.

Bargaining Power Of Customers

The bargaining power of customers is high in the American public education system, as parents and students have the ability to choose between different schools and educational programs.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low in the American public education system, as there are many suppliers of educational resources and services, making it a competitive market.

Threat Of New Entrants

The threat of new entrants is low in the American public education system, as there are significant barriers to entry, such as regulatory hurdles and high startup costs.

Intensity Of Rivalry

The intensity of rivalry is moderate in the American public education system, as there is competition among schools and educational institutions for students and resources.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 41.22%
Debt Cost 3.95%
Equity Weight 58.78%
Equity Cost 10.32%
WACC 7.69%
Leverage 70.12%

11. Quality Control: American Public Education, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
American Public Education

A-Score: 4.9/10

Value: 4.9

Growth: 5.4

Quality: 5.7

Yield: 0.0

Momentum: 10.0

Volatility: 3.3

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Universal Technical Institute

A-Score: 4.9/10

Value: 3.3

Growth: 6.3

Quality: 6.1

Yield: 0.0

Momentum: 9.5

Volatility: 4.0

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Lincoln Educational Services

A-Score: 4.5/10

Value: 4.1

Growth: 5.0

Quality: 4.0

Yield: 0.0

Momentum: 9.5

Volatility: 4.7

1-Year Total Return ->

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Coursera

A-Score: 4.4/10

Value: 6.9

Growth: 6.0

Quality: 3.1

Yield: 0.0

Momentum: 8.5

Volatility: 2.0

1-Year Total Return ->

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Udemy

A-Score: 3.9/10

Value: 6.4

Growth: 5.8

Quality: 4.1

Yield: 0.0

Momentum: 3.5

Volatility: 3.3

1-Year Total Return ->

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Chegg

A-Score: 3.7/10

Value: 9.6

Growth: 2.9

Quality: 3.4

Yield: 0.0

Momentum: 5.5

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

34.6$

Current Price

34.6$

Potential

-0.00%

Expected Cash-Flows