Just today, during the Nasdaq premarket session, (NASDAQ:APEI) American Public Education stock has gone up over 4% but is it a good investment in the longer term?
There are two key factors to consider before buying American Public Education stock. First, understand that index funds approximate market returns, which may be disappointing for an investor. But individual stocks can do much better than the market. For example, American Public Education stock fell 27% in the last year compared to an index fund’s return of 16%. Furthermore, over the past three years, APE shares have dropped 21%. Moreover, the stock fell 12% in the last quarter.
Second, consider that American Public Education reported disappointing earnings and revenues for its latest quarter. This quarter, the company missed estimates by $0.11 per share and reported a loss of $0.06 per share. The company also posted a negative surprise of $0.11 (-220%). Furthermore, profits dropped by almost 300% year over year.
While valuing American Public Education stock can be difficult, analysts often use two metrics to estimate its value: its trailing price/earnings ratio, and its per-share earnings over the last 12 months. APEI currently trades at 11x recent earnings.
APE provides both on-campus and online postsecondary education. The company offers degrees in areas like nursing, business administration, and national security. APE’s two most important revenue segments are online postsecondary education, Rasmussen University, and Hondros College of Nursing. Each of these segments generates revenue from net course registrations and tuition.