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small-cap

One NASDAQ- Listed Education Services Stock at Support Levels- American Public Education Inc

Jun 07, 2023 | Team Kalkine
One NASDAQ- Listed Education Services Stock at Support Levels- American Public Education Inc

American Public Education Inc

American Public Education, Inc., (NASDAQ: APEI) through its institutions, American Public University System (APUS), Rasmussen University (RU), Hondros College of Nursing (HCN), and Graduate School USA (GSUSA), provides online and campus-based postsecondary education and career learning.

Key Business positives:

Strong Brand: APEI has established itself as a reputable brand in the online education sector, particularly among military and public services members. The company's brands, APUS and HCON, have received accreditation from nationally recognized agencies and offer a wide range of online degree programs.

Focus on adult learners: APEI has a specific focus on adult learners, who represent a growing segment of the higher education market. The company tailors its programs to meet the needs of working adults, offering flexibility and convenience. APEI provides various accelerated and competency-based options to accommodate the unique circumstances of adult learners.

Affordable tuition: APEI strives to offer affordable tuition rates, especially when compared to traditional brick and mortar colleges and universities. The company recognizes the importance of accessibility and provides a range of financial aid options, including scholarships, grants, and student loans.

Strong Online platform: APEI boasts a robust online platform that allows students to conveniently access their courses and learning materials from any location with an internet connection. The platform features interactive tools such as live chat, discussion boards, and online quizzes to enhance the learning experience for students.

Recent Financial Update:

Total revenue: Total revenue increased by 12% year-over-year to USD 187.8 million. This growth was driven by several factors, including increased enrolment, higher tuition rates, and growth in online education.

Net income: Net income increased by 16% year-over-year to USD 34.5 million. This growth was driven by the increase in total revenue, as well as improved cost management.

Adjusted EBITDA: Adjusted EBITDA increased by 14% year-over-year to USD 57.9 million. This growth was driven by the increase in net income, as well as the absence of one-time expenses.

Free cash flow: Free cash flow increased by 15% year-over-year to USD 41.2 million. This growth was driven by the increase in adjusted EBITDA, as well as a decrease in capital expenditures.

Student enrolment: Student enrolment increased by 3% year-over-year to 113,000. This growth was driven by several factors, including the launch of new programs, increased marketing efforts, and improved retention rates.

Technical Observation (on the daily chart)

The stock price has experienced a significant decline of 64.46% over the past year, indicating a persistent downward trend. This downward trend is also evident in the medium-term, with a correction of 58.01% since YTD. However, there are signs of potential support at the range of USD 4.50-USD 5.00, suggesting some upward movement. The momentum indicator RSI (14 period) currently stands at 41.84, finding support near the 30-40 levels and moving upside, further suggesting the expectation of an upward momentum in the stock price. It is worth noting that the price is currently trading lower than both the 21-day and 50-day SMA trend-following indicators, and these SMAs will act as short-term resistances.

As per the above-mentioned price action, correction in the stock, and technical indicators analysis, a ‘Speculative Buy’ rating has been given American Public Education, Inc., (NASDAQ: APEI), at the current price of USD 5.13, as of June 07, 2023, at 09:20 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is June 07, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.