Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, education provider Apollo Group (Nasdaq: APOL ) has received a distressing two-star ranking.
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
| Headquarters (Founded) |
Phoenix (1973) |
| Market Cap |
$5.9 billion |
| Industry |
Education services |
| Trailing-12-Month Revenue |
$4.7 billion |
| Management |
Co-CEO Gregory Cappelli
Co-CEO Charles Edelstein |
| Return on Equity (Average, Past 3 Years) |
55.2% |
| Cash/Debt |
$1.6 billion / $599 million |
| Competitors |
Strayer Education (Nasdaq: STRA )
DeVry (NYSE: DV )
Bridgepoint Education (NYSE: BPI ) |
Sources: S&P Capital IQ and Motley Fool CAPS.
On CAPS, 15% of the 957 members who have rated Apollo believe the stock will underperform the S&P 500 going forward. These bears include sirtomeko and Jeffrey2012.
Just last month, sirtomeko touched on the tailwinds working against the stock: "Expect enrollment to continue to decline, especially with spiraling student loan debt nationwide. No amount of advertising can cover up that ugliness."
Over the next five years, in fact, Apollo is expected to grow its bottom line at a rate of only 3% annually. That's slower than that of rivals like Strayer (9%), DeVry (11%), and Bridgepoint (18%).
CAPS member Jeffrey2012 elaborates on the Apollo bear case:
Fundamentally, this company and along with the industry is going into a decline. There is no way they are going back to the heady days of the boom years with people buying into their terrible for profit degrees. I fail to see how people think this is a good company when student enrollments keep declining by double digits. While they may beat earnings for this quarter or the next, think long term. If new student enrollments keep declining, I fail to see how they are going to properly guide to ever rosier forecasts.
What do you think about Apollo, or any other stock for that matter? If you want to retire rich, you need to protect your portfolio from any undue risk. Staying away from dangerous stocks is crucial to securing your financial future, and on Motley Fool CAPS, thousands of investors are working every day to flag them. CAPS is 100% free, so get started!
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