If you go digging around for industries with high average growth forecasts based on analyst estimates, you're likely to run across the for-profit education niche.

One of the companies within that subset is Apollo Group (NASDAQ:APOL), which I called a valedictorian among its peers back in July. Since then, the stock has become noticeably more affordable.

Recent earnings
For its first quarter of 2010, revenues grew by 22% -- ignoring sales contributed by its acquisition of BPP Holdings -- and earnings rose about 30% organically. Consolidated revenues and net income were $1.27 billion and $240 million ($1.54 per share), respectively.

While enrollment increased, so did Apollo's account for bad debt expense, which the company said was a side effect of the macroeconomic environment as well as a growing number of students enrolled in associates degree programs. According to management, the company will continue focusing on accepting high-quality students -- those who are most likely to complete their degrees and move on to gainful employment.

Many of these schools rely on federally guaranteed student loans to subsidize their revenue, so someone who bets on for-profit educators should have confidence that the government will hold up its side of the bargain. As you can see below, market analysts are rather bullish on these companies' long-term earnings prospects.

Company

Price to Earnings Ratio

Expected (5-Year) Earnings Growth

ITT Educational Services (NYSE:ESI)

14.30

16.56%

Apollo Group

15.94

16.33%

DeVry (NYSE:DV)

22.03

19.81%

Capella Education (NASDAQ:CPLA)

33.22

26.82%

Strayer Education (NASDAQ:STRA)

30.91

20.90%

Career Education (NASDAQ:CECO)

26.77

14.28%

Universal Technical Institute (NYSE:UTI)

40.95

15.00%

Source: Yahoo! Finance.

Other side of the coin
That reliance, however, means that these companies have to play by the government's rules. Recently, the Department of Education found errors related to the timing of Apollo's reimbursement of federal funds back to the government in cases when students receiving financial aid withdrew from enrollment.

I think these findings are only a minor setback, and the company has ample cash to cover the estimated costs.

If you're not afraid that the government will renege on its guarantees, Apollo is a fine for-profit education stock, which trades at a relative discount to several of its peers based on earnings multiples. Furthermore, unless the Wall Street analysts are completely off base, its earnings growth prospects should provide investors with a comfortable cushion for the foreseeable future.

What do you think about Apollo, or any of the companies mentioned above? Sound off in the comments below!

Apollo Group is a Motley Fool Inside Value selection. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Chris Jones owns no shares of any company mentioned in this article, nor is he short anything. The Motley Fool's disclosure policy defends, "A lot of people go to college for eight years."