DA Davidson initiates coverage on American Public Education stock with Buy rating

Investing.com - DA Davidson initiated coverage on American Public Education (NASDAQ:APEI) with a Buy rating and a price target of $40.00 on Monday. The stock, currently trading at $32.25, has shown remarkable strength with a 46.5% gain year-to-date, and according to InvestingPro analysis, the company maintains a "GREAT" financial health score of 3.25.

The research firm cited an "attractive risk/reward" profile for the education company, noting it trades at 5.4 times 2026 EV/EBITDA, which is approximately half the peer average multiple despite APEI shares rising about 49% year-to-date.

American Public Education demonstrates mid-single-digit growth rates and low-teens adjusted EBITDA margins, which fall below peer averages of high-single-digit growth and mid-20% margins, according to DA Davidson’s analysis.

The firm believes the stock’s valuation provides "adequate margin of safety" for investors who may question the sustainability of improving fundamentals at the company’s Rasmussen University (RU) segment.

DA Davidson also highlighted recent balance sheet improvements as likely to support valuation, including the sale of two administrative buildings, reclassification of $24.5 million to unrestricted cash, and the redemption of $43 million in preferred equity.

In other recent news, American Public Education Inc. (APEI) reported its second-quarter 2025 earnings, which showed a mixed financial performance. The company posted a net loss per share of $0.02, missing the forecasted earnings of $0.05 per share by 140%. Despite this earnings miss, investors reacted positively to the company’s revenue performance and strategic updates. In another development, APEI appointed James Kenigsberg as interim Chief Innovation and Technology Officer. Kenigsberg, who stepped down from the company’s Board of Directors to take on this role, brings over 20 years of experience in education technology. He was previously the founding Chief Technology Officer at 2U, Inc., where he contributed to the company’s growth into a global education technology provider. These recent developments reflect APEI’s ongoing efforts to enhance its educational platforms with artificial intelligence.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.