Critical Contrast: K12 (NYSE:LRN) & American Public Education (APEI)
K12 (NYSE: LRN) and American Public Education (NASDAQ:APEI) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitabiliy, valuation, institutional ownership, risk, earnings and analyst recommendations.
Insider and Institutional Ownership
79.0% of K12 shares are owned by institutional investors. Comparatively, 93.4% of American Public Education shares are owned by institutional investors. 18.3% of K12 shares are owned by company insiders. Comparatively, 3.6% of American Public Education shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a breakdown of current recommendations for K12 and American Public Education, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|American Public Education||0||2||0||0||2.00|
K12 currently has a consensus target price of $17.00, suggesting a potential downside of 6.03%. American Public Education has a consensus target price of $24.00, suggesting a potential upside of 8.11%. Given American Public Education’s higher probable upside, analysts clearly believe American Public Education is more favorable than K12.
This table compares K12 and American Public Education’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|American Public Education||6.01%||9.07%||7.47%|
Valuation & Earnings
This table compares K12 and American Public Education’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|K12||$894.08 million||0.77||$42.05 million||$0.14||129.21|
|American Public Education||$304.86 million||1.18||$60.79 million||$1.13||19.65|
American Public Education has higher revenue, but lower earnings than K12. American Public Education is trading at a lower price-to-earnings ratio than K12, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
K12 has a beta of -0.2, indicating that its stock price is 120% less volatile than the S&P 500. Comparatively, American Public Education has a beta of 1.17, indicating that its stock price is 17% more volatile than the S&P 500.
American Public Education beats K12 on 9 of the 14 factors compared between the two stocks.
K12 Company Profile
K12 Inc. (K12) is a technology-based education company. The Company offers curriculum, software systems and educational services designed to facilitate individualized learning for students in kindergarten through 12th grade (K-12). It provides a continuum of technology-based educational products and solutions to public school districts, public schools, virtual charter schools, private schools and families. The Company offers a set of products and services primarily to three lines of business, which include Managed Public School Programs, which consists of virtual and blended schools; Institutional business, which includes educational products and services sold to school districts, public schools and other educational institutions, and Private Pay Schools and Other, which includes private schools, including international, for which it charges student tuition and direct consumer sales. It sells individual online courses and supplemental educational products directly to families.
American Public Education Company Profile
American Public Education, Inc. provides online and on-campus postsecondary education. The Company provides postsecondary education through its subsidiary institutions, American Public University System, Inc. (APUS) and Hondros College of Nursing (HCON). It operates through two segments: American Public Education Segment, which consists of the operational activities of APUS, other corporate activities, and minority investments, and Hondros College of Nursing Segment, which consists of the operational activities of HCON. APUS provides online postsecondary education to approximately 88,700 adult learners serving the needs of the military and public safety communities as of December 31, 2016. As of December 31, 2016, HCON provided nursing education to approximately 1,300 students across five campuses in the State of Ohio, as well as online. It offers a Diploma in Practical Nursing and an Associate Degree in Nursing. As of December 31, 2016, the Company had approximately 90,000 students.
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