American Public Education (APEI) Downgraded From Buy to Hold

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NEW YORK (TheStreet) -- American Public Education  (APEI) has been downgraded by TheStreet Ratings from Buy to Hold with a ratings score of C+.  TheStreet Ratings Team has this to say about their recommendation:

TheStreet Ratings team rates AMERICAN PUBLIC EDUCATION as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate AMERICAN PUBLIC EDUCATION (APEI) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • APEI's revenue growth has slightly outpaced the industry average of 9.9%. Since the same quarter one year prior, revenues rose by 10.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • APEI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.57, which clearly demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for AMERICAN PUBLIC EDUCATION is rather high; currently it is at 65.39%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, APEI's net profit margin of 12.92% significantly trails the industry average.
  • AMERICAN PUBLIC EDUCATION has improved earnings per share by 33.3% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past two years indicate the company has managed its earnings and share float. We anticipate this stability to falter in the coming year and, in turn, the company to deliver lower earnings per share than the prior full year. During the past fiscal year, AMERICAN PUBLIC EDUCATION reported lower earnings of $2.34 versus $2.35 in the prior year. For the next year, the market is expecting a contraction of 5.1% in earnings ($2.22 versus $2.34).
  • APEI has underperformed the S&P 500 Index, declining 18.78% from its price level of one year ago. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.
  • You can view the full analysis from the report here: APEI Ratings Report

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