For-profit education may have once been a hot market sector, but most of these stocks have been in detention for the past year or so. While ITT Educational Services (NYSE:ESI), Laureate (NASDAQ:LAUR) and DeVry (NYSE:DV) have done pretty well, other well-known names like Strayer (NASDAQ:STRA), Corinthian Colleges (NASDAQ:COCO), and Apollo Group (NASDAQ:APOL) have lagged behind.

Apollo in particular is a seductive idea. It's the biggest, it generates good profit margins and cash flow, and it produces a good return on equity. But let's see whether this is just an invitation to the school of hard knocks.

The company previously warned that second-quarter results wouldn't be as good as hoped, and it delivered on that warning. Revenue was up almost 13%, but reported operating income fell 7%; adjusting back for stock option expense only lifts that to 2% growth. Still, if you adjust this quarter's earnings for a severance agreement with the former CEO and adjust last year's number for stock option expense, the year-over-year EPS performance looks a fair bit better.

Stepping back from the numbers, I'm not quite sure what to make of the story here. Overall enrollment was up 10% (not so good), but online enrollment for the University of Phoenix and Axia was up more than 20%. The company also spent about 12% less on advertising this quarter, which would suggest fewer future enrollments, but it also implies that management is preparing to start spending more.

Last and not least, I'm wondering what to make of the details of the company's enrollment numbers. Associate degree enrollments more than doubled, but bachelor and master enrollments fell. I don't pretend to be an expert here, but it would seem to me that you'd generally want more bachelor degree students, since they'll assumably stick around longer and pay more total tuition fees.

When it's all said and done, I have to admit to a fair bit of uncertainty regarding this company and stock. And while I respect that it's built a good franchise, it seems like more and more entities (including traditional universities) are getting into this space. So while I think the shares are trading at a pretty good discount to fair value, I for one would rather wait a bit longer before investing my own cash.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).