APEI Expected to Beat 1Q Earnings - Analyst Blog
May 07 2013 - 9:40AM
Zacks
We expect higher education
provider, American Public Education, Inc. (APEI)
to beat expectations when it reports the first-quarter 2013 results
on May 9.
Why a Likely Positive
Surprise?
Our proven model shows that
American Public is likely to beat earnings because it has the right
combination of two key ingredients.
Positive Zacks
ESP: Earnings Surprise Prediction or ESP, which represents
the difference between the Most Accurate estimate and the Zacks
Consensus Estimate, is at 1.75%. This is very meaningful and a
leading indicator of a likely positive earnings surprise for
shares.
Zacks #3 Rank
(Neutral): American Public carries a Zacks Rank #3
(Hold).Note that stocks with Zacks Ranks of #1, #2 and #3 have a
significantly higher chance of beating earnings. The sell rated
stocks (#4 and #5) should never be considered going into an
earnings announcement.
The combination of American
Public’s Zacks Rank #3 (Hold) and +1.75% ESP makes us confident in
looking for a positive earnings beat on May 9th.
What is Driving the
Better than Expected Earnings?
Strategic initiatives like ePress
initiative, information and technology upgrades, Title IV
processing automation and lower bad-debt expense are expected to
lead to a positive earnings surprise in the upcoming quarter, even
though new student starts are expected to decline. Moreover, the
company intends to spend less on traditional media advertising,
which are relatively expensive and easily attract fund abusers.
This will further lower operating costs.
The positive trend is seen in the
trailing four-quarter average surprise of almost 12.0%, which was
greatly helped by the 10.5% positive surprise in the last-reported
quarter. This was possible because American Public did a good job
of controlling costs owing to its strategic initiatives. Top line
growth and brisk student enrollments also helped.
Other Stocks to
Consider
American Public is not the only
firm looking up this earnings season. We also see likely earnings
beats coming from these three industry peers:
Giant Interactive Group,
Inc. (GA), with an Earnings ESP of +4.76% and a Zacks Rank
#2 (Buy)
Perion Network Ltd
(PERI), with an Earnings ESP of +8.57% and a Zacks Rank #2
(Buy)
K12, Inc. (LRN),
with an Earnings ESP of +4.35% and a Zacks Rank #3 (Hold)
AMER PUB EDUCAT (APEI): Free Stock Analysis Report
GIANT INTERACTV (GA): Free Stock Analysis Report
K12 INC (LRN): Free Stock Analysis Report
PERION NETWORK (PERI): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
Perion Network (NASDAQ:PERI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Perion Network (NASDAQ:PERI)
Historical Stock Chart
From Jul 2023 to Jul 2024