Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of American Public Education, Inc. Tumbled

By Jeremy Bowman – Feb 28, 2014 at 3:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is this meaningful? Or just another movement?

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of American Public Education (APEI -0.29%) were getting sent to the principal's office today, falling as much as 22% after a disappointing fourth-quarter earnings report.

So what: The for-profit educator delivered a per-share profit of $0.51, down from $0.74 a year ago and short of expectations of $0.54, while revenue edged down 4% to $82.9 million, better than the analyst consensus at $81 million. Those figures may have evened each other out, but the company saw new student course registrations decline by 10% at its principal American Public University school, which the company believed was due in part to tuition assistance cuts from the Department of Defense.   

Now what: American Public Education's outlook was also weak, as it expects a first-quarter revenue increase of 0%-3%, and EPS of $0.43-$0.48, well below estimates of $0.67. New student course registrations are also projected to decline by 7%-9%. This industry has seen a contraction over the past couple of years due to increasing regulatory pressure and student skepticism, but several other educator stocks are on the rebound as their enrollment figures seem to be bottoming out. Today's report makes clear that American Public Education has not yet turned the corner, and with profits falling 30%-40%, this stock may have further to fall. 

Jeremy Bowman has no position in any stocks mentioned. The Motley Fool recommends American Public Education. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

American Public Education Stock Quote
American Public Education
APEI
$13.74 (-0.29%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.