Denver, CO – The recent surge in the stock price of American Public Education, Inc. has caught the attention of investors, with a staggering threefold increase in value over the last six months. However, this impressive growth comes after a tumultuous five-year period where the stock plummeted more than 50%. The question on everyone’s mind now is whether this surge marks a successful turnaround for the company or is just a fleeting episode in a long history of disappointing returns for shareholders.
As we delve into the company’s activities, it becomes clear that American Public Education, Inc. is a holding company overseeing several universities focused primarily on adult learners. The American Public University System, with its online platform catering to nearly 90,000 adult learners, including military personnel and veterans, stands as the flagship institution in the company’s portfolio. Additional acquisitions, such as Hondros College of Nursing, Rasmussen University, and Graduate School USA, have expanded APEI’s offerings, particularly in the field of nursing education.
Despite the significant growth and success of the APUS universities in the past, the company faced challenges maintaining its stock price between 2007 and 2020. While student enrollments and revenues soared during this period, the stock remained flat, reflecting a shift in investor sentiment and valuation metrics. Management’s strategic decision to pursue inorganic growth through acquisitions like Hondros College of Nursing failed to reignite growth in the company’s main asset, leading to a decline in revenue and profits over the years.
The appointment of CEO Angla Selden in 2019 brought renewed hope for APEI as the company navigated the challenges brought on by the Covid-19 pandemic. While the shift to online learning presented an opportunity for growth, APEI’s acquisition of Rasmussen University in 2021 proved to be a costly misstep. Declining enrollments and financial losses at Rasmussen University significantly impacted the company’s overall performance, leading to a substantial drop in the stock price by 2023.
However, as the company enters 2024, there are signs of a resurgence in APEI’s performance. Strong earnings in 2023 and improved cost discipline have instilled confidence in investors. Management’s focus on profitability and operational efficiency, coupled with the expiration of costly contracts, positions APEI for potential growth in the coming years. With a forward-looking strategy and a renewed commitment to financial stability, APEI aims to deliver sustainable returns for its shareholders and stakeholders.
Looking ahead, analysts project a positive outlook for APEI, with expectations of increased free cash flow and improved financial performance in 2024 and beyond. As the company continues to adapt to the changing landscape of online education and nursing programs, investors remain optimistic about the potential for APEI to capitalize on growth opportunities and deliver long-term value to its stakeholders.
