American Public Education Inc (NASDAQ: APEI)

Sector: Consumer Defensive Industry: Education & Training Services CIK: 0001201792
Market Cap 788.34 Mn
P/B 2.82
P/E 32.57
P/S 1.20
ROIC (Qtr) 7.67
Div Yield % 0.00
Rev 1y % (Qtr) 6.59
Total Debt (Qtr) 166.24 Mn
Debt/Equity (Qtr) 0.60
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About

American Public Education, Inc. (APEI) operates in the postsecondary education industry, providing online and campus-based education to approximately 107,000 students and career learning to approximately 27,000 individuals through its subsidiary institutions. The company's main business activities include providing online and campus-based postsecondary education, as well as career learning and training. These services are offered through four subsidiary institutions: American Public University System (APUS), Rasmussen University (RU), Hondros College...

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Investment thesis

Bull case

  • Strong operating cash flow of 75.11M provides robust 0.45x coverage of total debt 166.24M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 193.14M provide 16.55x coverage of short-term debt 11.67M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 437.48M provides 2.63x coverage of total debt 166.24M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 75.11M provides exceptional 20.59x coverage of interest expenses 3.65M, showing strong debt service capability.
  • Tangible assets of 437.48M provide exceptional 18.26x coverage of deferred revenue 23.95M, showing strong service capability backing.

Bear case

  • Cash reserves of 193.14M provide limited coverage of acquisition spending of (709000), which is -272.42x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 82.92M provides weak coverage of capital expenditures of (7.81M), with a -10.62 ratio suggesting additional external financing needs for growth initiatives.
  • Free cash flow of 82.92M represents just -344.08x of debt issuance (241000), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 75.11M is outpaced by equity issuance of (3.68M) (-20.43 ratio), indicating concerning reliance on equity markets for funding operations.
  • R&D investment of 0 represents just 0x of SG&A expenses of 280.92M, indicating potential underinvestment in innovation relative to administrative overhead.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Education & Training Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 EDU New Oriental Education & Technology Group Inc. 9.35 Bn 24.58 1.82 0.78 Bn
2 TAL TAL Education Group 6.18 Bn 22.22 2.20 0.38 Bn
3 GHC Graham Holdings Co 5.47 Bn 12.27 1.91 1.17 Bn
4 LAUR Laureate Education, Inc. 5.20 Bn 25.55 3.29 0.44 Bn
5 LOPE Grand Canyon Education, Inc. 4.62 Bn 21.85 4.23 0.11 Bn
6 LRN Stride, Inc. 3.61 Bn 11.32 1.43 0.56 Bn
7 ATGE Covista Inc. 3.46 Bn 13.66 1.83 0.73 Bn
8 PRDO PERDOCEO EDUCATION Corp 2.84 Bn 42.39 1.73 0.06 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.54 0.71
EV to Cash from Ops. EV/CFO 10.75 6.80
EV to Debt EV to Debt 4.86 11.15
EV to EBIT EV/EBIT 15.99 112.78
EV to EBITDA EV/EBITDA 11.49 6.48
EV to Free Cash Flow [EV/FCF] EV/FCF 9.74 5.57
EV to Market Cap EV to Market Cap 1.02 582,173.64
EV to Revenue EV/Rev 1.23 1.74
Price to Book Value [P/B] P/B 2.82 -3.80
Price to Earnings [P/E] P/E 32.57 -1.70
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.14 11.73
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.21
Dividend per Basic Share Div per Share (Qtr) 0.00 0.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.69
Interest Coverage Int. cover (Qtr) 13.84 53.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 135.31 -82.12
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 19.04 25.11
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.54
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 91.28 -39.04
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 46.44 -34.79
EBIT Growth (1y) % EBIT 1y % (Qtr) 119.07 -40.70
EBT Growth (1y) % EBT 1y % (Qtr) 126.13 -52.53
EPS Growth (1y) % EPS 1y % (Qtr) 161.54 -29.51
FCF Growth (1y) % FCF 1y % (Qtr) 276.72 -36.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 11.45 -3.42
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.25 0.63
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 2.11 0.73
Current Ratio Curr Ratio (Qtr) 2.84 1.63
Debt to Equity Ratio Debt/Equity (Qtr) 0.60 3.83
Interest Cover Ratio Int Coverage (Qtr) 13.84 53.05
Times Interest Earned Times Interest Earned (Qtr) 13.84 53.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.10 -30.62
EBIT Margin % EBIT Margin % (Qtr) 7.71 -82.13
EBT Margin % EBT Margin % (Qtr) 7.16 -47.07
Gross Margin % Gross Margin % (Qtr) 54.20 50.48
Net Profit Margin % Net Margin % (Qtr) 3.70 -48.61