American Public Education, Inc. APEI is slated to report third-quarter 2024 results on Nov. 12, after market close.

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In the last reported quarter, the company’s earnings per share (EPS) met the Zacks Consensus Estimate, but revenues missed the same by 0.8%. On a year-over-year basis, revenues grew 3.9% and EPS rose 104%.

The company’s earnings topped the consensus mark in three of the trailing four quarters and met on one occasion, an average surprise being 133.4%.

Trend in Estimate Revision

The Zacks Consensus Estimate for the third-quarter EPS has remained stable at 1 cent per share in the past 60 days. The estimated figure indicates a 50% decrease from the year-ago quarter’s EPS of 2 cents.

American Public Education, Inc. Price and EPS Surprise

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

The consensus mark for revenues is pegged at $153.62 million, suggesting a 1.8% year-over-year rise.

Factors to Note

Enrollments & Revenues

American Public’s third-quarter revenues are likely to have increased slightly from the previous year due to robust performance across all its segments. The company has been witnessing strong enrollment at American Public University System segment or APUS (which accounted for 50.4% of second-quarter revenues) and Hondros College of Nursing segment or HCN (which accounted for 10.7% of second-quarter revenues), along with improvement at Rasmussen University or RU (which accounted for 34.7% of second-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 1-3% year over year to $152-$155 million.

APUS’ total net course registrations are likely to be 90,500-92,300, reflecting a flat to 2% decline year over year. HCN’s total enrollment is expected to increase 10% from the prior year’s figure to 3,100 students. RU’s student enrollment is expected to be up 0.1% from the year-ago quarter’s figure of 13,500. Within RU, On-ground student enrollment is likely to decline 6% to 6,030, while Online student enrollment is expected to rise 4% to 7,440 year over year.

For the third quarter, we expect revenues in the APUS and HCN segments to increase 1.3% to $77.4 million and 11.6% to $15.3 million, respectively, year over year. Our model predicts the RU segment’s revenues will decline marginally to $52 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. This apart, the company’s second and third quarters of every year tend to be seasonally low and generate low EBITDA.

The company anticipates adjusted EPS between a loss of 6 cents and earnings of 5 cents versus a loss of 25 cents per share reported a year ago. Adjusted EBITDA is expected to be within $9-$12 million, a decline of 34-56% year over year.

For the to-be-reported quarter, we expect adjusted EBITDA to decline 40.7% to $10.7 million and adjusted EBITDA margins to decline to 7% from 12% reported a year ago. We project adjusted EPS to be at break-even.