Apollo Education (APOL) Q2 Beats on Starts and EPS; Wells Fargo Comments
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Rating Summary:
5 Buy, 12 Hold, 2 Sell
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Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
5 Buy, 12 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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Wells Fargo maintained a Market Perform rating on Apollo Education (NASDAQ: APOL). Comments follow Q2 results. In the view of analyst Trace A. Urdan, the company posted a solid beat on starts and EPS.
"Apollo Group reported strong results in terms of student starts, persistence and cost management during its February quarter. The only weak note was slightly weaker revenue per student. The company reiterated previous full year revenue and operating income guidance," said Urdan.
"Relative to our estimate revenue per student of 3.8% was below our modeled 3.0% but other revenue, including Apollo Global came in higher than expected. Excluding restructuring, legal expenses and contingency costs related to acquisitions, EPS was $0.28 vs. Street consensus of $0.19 and our $0.13. Relative to our model, the company beat at the cost of service line (47.1% vs. 47.7%) bad debt came in lower (1.7% vs. 2.0%), sales and marketing came in line with expectations (29.2% vs. 29.4%) though more spent on admissions and less on marketing than we had modeled, and G&A came in lower 10.0% vs. 11.7%. New student enrollment declined 16.5% versus our modeled 18.5% and total enrollment decline 16.8% vs. our 17.5% estimate indicating better retention. The company also announced a new President of the University of Phoenix, which was expected, as well as a subpoena from the Office of Inspector General (OIG) for the Department of Education for documents detailing a variety of practices dating back to 2007," added the analyst.
For an analyst ratings summary and ratings history on Apollo Education click here. For more ratings news on Apollo Education click here.
Shares of Apollo Education closed at $34.24 yesterday.
"Apollo Group reported strong results in terms of student starts, persistence and cost management during its February quarter. The only weak note was slightly weaker revenue per student. The company reiterated previous full year revenue and operating income guidance," said Urdan.
"Relative to our estimate revenue per student of 3.8% was below our modeled 3.0% but other revenue, including Apollo Global came in higher than expected. Excluding restructuring, legal expenses and contingency costs related to acquisitions, EPS was $0.28 vs. Street consensus of $0.19 and our $0.13. Relative to our model, the company beat at the cost of service line (47.1% vs. 47.7%) bad debt came in lower (1.7% vs. 2.0%), sales and marketing came in line with expectations (29.2% vs. 29.4%) though more spent on admissions and less on marketing than we had modeled, and G&A came in lower 10.0% vs. 11.7%. New student enrollment declined 16.5% versus our modeled 18.5% and total enrollment decline 16.8% vs. our 17.5% estimate indicating better retention. The company also announced a new President of the University of Phoenix, which was expected, as well as a subpoena from the Office of Inspector General (OIG) for the Department of Education for documents detailing a variety of practices dating back to 2007," added the analyst.
For an analyst ratings summary and ratings history on Apollo Education click here. For more ratings news on Apollo Education click here.
Shares of Apollo Education closed at $34.24 yesterday.
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