Lake Street starts coverage on APEI with Buy, $30 target

The anticipated redemption of $40 million in preferred stock in June was also cited as a factor that could contribute to a near-term increase in net income for American Public Education (NASDAQ:APEI). Lake Street Capital Markets expects these elements to help narrow the valuation gap between APEI and its industry peers. With the next earnings report due on May 13, 2025, InvestingPro subscribers can access comprehensive analysis and detailed financial metrics in the Pro Research Report, one of 1,400+ available deep-dive company analyses.In their commentary, Lake Street Capital Markets analysts stated, "We see several catalysts offering today’s investor the chance to climb aboard the APEI boat on a rising tide." They expressed confidence that the identified drivers would support the stock’s performance and justify the initiation of their Buy rating with a $30 price target, which aligns with the current analyst range of $24-$28.

The anticipated redemption of $40 million in preferred stock in June was also cited as a factor that could contribute to a near-term increase in net income for American Public Education. Lake Street Capital Markets expects these elements to help narrow the valuation gap between APEI and its industry peers. With the next earnings report due on May 13, 2025, InvestingPro subscribers can access comprehensive analysis and detailed financial metrics in the Pro Research Report, one of 1,400+ available deep-dive company analyses.In their commentary, Lake Street Capital Markets analysts stated, "We see several catalysts offering today’s investor the chance to climb aboard the APEI boat on a rising tide." They expressed confidence that the identified drivers would support the stock’s performance and justify the initiation of their Buy rating with a $30 price target, which aligns with the current analyst range of $24-$28.

Furthermore, the analysts argued that American Public Education could serve as a relatively secure investment option amid concerns about tariffs and their impact on the U.S. economy. They emphasized that APEI’s graduates predominantly work in stable sectors such as the military and healthcare services, which may provide some insulation from economic fluctuations.

The anticipated redemption of $40 million in preferred stock in June was also cited as a factor that could contribute to a near-term increase in net income for American Public Education. Lake Street Capital Markets expects these elements to help narrow the valuation gap between APEI and its industry peers.

In their commentary, Lake Street Capital Markets analysts stated, "We see several catalysts offering today’s investor the chance to climb aboard the APEI boat on a rising tide." They expressed confidence that the identified drivers would support the stock’s performance and justify the initiation of their Buy rating with a $30 price target.

In other recent news, American Public Education (APEI) reported its fourth-quarter 2024 financial results, which showcased a mixed performance. The company achieved revenue of $164.1 million, surpassing expectations, although earnings per share (EPS) of $0.63 fell short of the anticipated $0.69. B.Riley analyst Griffin Boss initiated coverage of APEI with a Buy rating and a price target of $28.00, citing increased enrollment across its educational institutions. The firm revised its fiscal year 2025 revenue estimate upward to $654 million but adjusted its EBITDA forecast downward to $77 million due to higher operating expenses.

Truist Securities raised its price target for APEI to $24 from $20, maintaining a Hold rating, following the company’s positive fourth-quarter results and slightly improved forward guidance for 2025. The analysts noted management’s optimism regarding potential revenue synergies from the planned consolidation of portfolio institutions by the fourth quarter of 2025. William Blair upgraded APEI’s stock from Market Perform to Outperform, emphasizing the company’s robust enrollment and revenue growth, particularly in its nursing colleges.

The company is actively working on consolidating its educational institutions, which is anticipated to enhance operational efficiency and drive future growth. This strategic move is expected to offer opportunities for cost savings and mitigate regulatory risks. As APEI continues to focus on enrollment growth and improved profitability, investors and market analysts are keeping a close watch on the company’s progress toward its 2025 targets.

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