Based on the aggregated intelligence of 125,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, education provider Apollo Group (Nasdaq: APOL ) has received the distressing two-star ranking. While one-star stocks have been the worst performers, our data has shown that two-star stocks still lag the market by a significant margin and should be approached with caution; conversely, highly-rated stocks have outperformed the S&P.
With that in mind, let's take a closer look at Apollo's business, and see what CAPS investors are saying about the stock right now.
Apollo facts
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Headquarters (founded)
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Phoenix (1973)
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Market Cap
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$12.34 billion
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Industry
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Education and Training Services
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TTM Revenue
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$3.14 billion
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Management
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Founder/Chairman Dr. John Sperling
CEO Rob McGregor
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P/E Ratio (APOL and S&P 500)
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27 and 13.4
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Competitors
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Strayer Education (Nasdaq: STRA )
DeVry (NYSE: DV )
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CAPS members bearish on APOL also bearish on:
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Apple (Nasdaq: AAPL )
General Electric (NYSE: GE )
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CAPS members bullish on APOL also bullish on:
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General Motors (NYSE: GM )
Amazon.com (Nasdaq: AMZN )
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Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.
Over on CAPS, 25 of the 181 All-Star members who have rated Apollo -- some 14% -- believe the stock will underperform the S&P 500 going forward. Among the rest of the general bearish population are EnigmaDude and hateninja.
Late last month, EnigmaDude wrote that Apollo's bear case all boiled down to valuation: "great fundamentals but price (PE, P/B, P/S) is way too high for this market!"
In a pitch from three weeks earlier, hateninja agrees, citing several of Apollo's headwinds as reason to drop out of the stock:
I worked for the [University of Phoenix (UOP)] as a contractor for a few months and have nothing against the company. They own many of their assets, as opposed to leasing, which in turn provides them with a significant long-term cost advantage.
Be that as it may, it costs too much to go to school there. Part of their success is that it's convenient. And while this wasn't a problem over the past decade, it will be very soon. Many of those who will be laid off in the coming months/year will enroll at a publicly-funded college for much less money, because they have more time available being unemployed. Another problem is that some employers do not recognize a UOP online degree as the same one from a regular college or university.
What do you think about Apollo, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 125,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.
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