Based on the aggregated intelligence of 160,000-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

$7.8 billion

Industry

Education services

Trailing-12-Month Revenue

$4.5 billion

Management

Co-CEO Gregory Cappelli
Co-CEO Charles Edelstein

Return on Equity (Average, Past 3 Years)

50.8%

Compound Annual Revenue and Net Income Growth (Over Past 3 Years)

20.5% and 17.9%

1-Year Return

(15.5%)

Competitors

Career Education (Nasdaq: CECO)
DeVry (NYSE: DV)
ITT Educational Services

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 14% of the 949 members who have rated Apollo believe the stock will underperform the S&P 500 going forward. These bears include robertshrestha and All-Star TMFDeej, who is ranked in the top 1% of our community.

Two days ago, robertshrestha helped school Fools on a few of Apollo's risks: "For-profit educators are being scrutinized more and more, and weakness in economy could impact corporate tuition assistance. I just can't see how these programs are as valuable as they claim."

In a pitch from last week, TMFDeej followed the lead of hedge fund manager Steve Eisman and gave a failing grade to the stock:

In 2009 [Apollo's] revenue increased by $833 million. More than $1.1 billion of that, over 100%, came from federally-funded loans. Guess how much of that money [Apollo] spent on faculty and instruction...wait for it...$99 million. As Eisman put it, only nine cents of every dollar in student loans provided by the government went to the actual education of students.

On its own, this situation does not appear sustainable, making these companies good short candidates. However, there is an actual catalyst that could cause them to lose a huge chunk of their revenue already in the works. It's called the "Gainful Employment" rule. ... This rule seeks to limit students' debt-service-to-income ratio to 8%. It makes sense if one thinks about it ... the government should only guarantee loans that students have a realistic chance of actually paying back. What a novel concept.

If this new rule actually passed it has the potential to slice the revenue of public colleges by as much as half by the year 2011. Ouch.

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!  

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Apollo is a Motley Fool Inside Value selection. The Fool's disclosure policy always gets a perfect score.