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On Friday, Truist Securities updated its outlook on American Public Education (NASDAQ:APEI) shares, raising the price target to $24 from $20, while maintaining a Hold rating. The adjustment follows the company’s reported fourth-quarter results, which surpassed expectations, and its forward guidance for 2025 that was slightly above prior forecasts. According to InvestingPro analysis, APEI is currently trading near its 52-week high of $23.84 and appears slightly undervalued based on its Fair Value assessment.
American Public Education’s recent financial performance indicated a positive trend, with the company showing progress in returning its Rasmussen University (RU) to growth in enrollment and profitability. The institution also reported another quarter of strong NCLEX outcomes, an examination for the licensing of nurses in the United States. With revenue reaching $613.25 million and a solid current ratio of 2.65, InvestingPro data shows the company maintains strong liquidity and has achieved a 29.8% price return over the past six months. InvestingPro subscribers have access to 12 additional key insights about APEI’s financial health and growth prospects.
Truist analysts noted management’s optimistic view regarding potential revenue synergies from the planned combination of portfolio institutions. This merger is expected to be completed in the fourth quarter of 2025. Analysts believe that this strategic move is logical and could provide additional opportunities for general and administrative (G&A) cost savings, as well as potentially mitigate risks associated with the 90/10 rule, which is a regulation that limits the amount of revenue for-profit colleges can receive from federal student aid.
The positive outlook and the anticipated benefits from the merger of educational institutions under American Public Education’s portfolio have led to the increase in the price target. The Truist analyst stated, "We are encouraged by progress returning RU to enrollment growth/profitability with another quarter of solid NCLEX outcomes. Management struck an optimistic tone around potential revenue synergies around the combination of portfolio institutions targeted to close in 4Q25. We think the combination of institutions is logical and should likely offer additional opportunities for G&A savings and potential mitigation of 90/10 risks. We increase our PT to $24 from $20."
Investors and market watchers will continue to monitor American Public Education’s performance as it works towards achieving its 2025 targets and completing the integration of its portfolio institutions. For comprehensive analysis and detailed insights, including the company’s extensive Pro Research Report covering key financial metrics and growth indicators, visit InvestingPro.
In other recent news, American Public Education (APEI) reported its fourth-quarter 2024 earnings, revealing a mixed financial performance. The company posted earnings per share of $0.63, which fell short of the anticipated $0.69. However, revenue exceeded expectations, reaching $164.1 million compared to the forecasted $161.78 million, marking a 7.4% year-over-year increase. Analyst Stephen Sheldon from William Blair upgraded APEI’s stock rating from Market Perform to Outperform, citing the company’s robust enrollment and revenue growth as positive indicators. Sheldon noted significant improvements in profitability at APEI’s nursing colleges and highlighted potential revenue and cost synergies from the planned consolidation of educational units by 2025.
The company plans to consolidate its educational institutions by the fourth quarter of 2025, aiming to streamline operations and enhance performance. APEI forecasts a positive revenue outlook for 2025, targeting between $650 million and $660 million. The company also expects adjusted EBITDA to be between $75 million and $85 million. Despite the earnings miss, APEI’s strategic focus on growth in the nursing and military education sectors, as well as its plans for institutional consolidation, have been well-received by analysts.
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