Return in 2010: -34.8%, compared with group average return of -14.5% and S&P 500 return of 12.8%Consensus Expectations for Net Fiscal 2011 Earnings: $4.58 per share, or $670.5 million, compared with fiscal 2010 profits of $3.62 per share, or $553 million Revenue Expectations for Fiscal 2011: $4.68 billion, compared with fiscal 2010 revenue of $4.93 billion Fall 2010 Enrollment Market Share: 22%, or 440,000 Average Tuition: $21,900 for Associates, $66,196 for Bachelors and $27,318 for Graduates Samford noted that Apollo, along with DeVry (DV) and Corinthian Colleges (COCO), offers relatively high tuition rates, presenting a competitive disadvantage to lower-priced peers like American Public Education (APEI) and Bridgepoint Education (BPI), when schools face regulatory hurdles. Apollo's investment in a University Orientation program should help position the company well by the time the gainful employment rules take effect, Samford said. Apollo's orientation program is a free, three-week, non-credit bearing program that was made mandatory as of Nov. 1 for all new students enrolling at University of Phoenix with fewer than 24 transfer credits. RBC's Wetenhall recently reiterated a sector perform rating on Apollo shares, lowering his price target by $5 to $40, noting that questions about enrollment growth will "limit enthusiasm" for the stock "until greater clarity emerges." He pointed out that management teams at Apollo were largely net sellers of the company's shares on the open market last year which "potentially suggests a lack of strong conviction in enrollment and earnings growth for the sector in the coming quarters." Spectrum Management's Phillips said that Apollo has "the hardest time sustaining historical revenue increases" and is "heavily reliant on government aid for their students," leading him to suggest investors avoid the stock.
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