Financial Survey: K12 (LRN) & American Public Education (APEI)

K12 (NYSE: LRN) and American Public Education (NASDAQ:APEI) are both small-cap non-cyclical consumer goods & services companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, risk, valuation, institutional ownership, analyst recommendations and earnings.

Analyst Ratings

This is a summary of current recommendations and price targets for K12 and American Public Education, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
K12	0	0	2	0	3.00
American Public Education	0	1	0	0	2.00

K12 currently has a consensus target price of $18.50, indicating a potential upside of 4.88%. American Public Education has a consensus target price of $19.00, indicating a potential upside of 5.56%. Given American Public Education’s higher possible upside, analysts plainly believe American Public Education is more favorable than K12.

Valuation and Earnings

This table compares K12 and American Public Education’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
K12	$888.52 million	0.81	$35.91 million	N/A	N/A
American Public Education	$300.31 million	0.97	$56.56 million	$0.95	18.95

American Public Education has higher revenue, but lower earnings than K12.

Profitability

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
K12	-3.06%	-4.54%	-3.58%
American Public Education	5.18%	7.87%	6.55%

Institutional & Insider Ownership

78.6% of K12 shares are held by institutional investors. Comparatively, 93.6% of American Public Education shares are held by institutional investors. 18.3% of K12 shares are held by company insiders. Comparatively, 3.6% of American Public Education shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

K12 has a beta of -0.2, meaning that its stock price is 120% less volatile than the S&P 500. Comparatively, American Public Education has a beta of 1.17, meaning that its stock price is 17% more volatile than the S&P 500.

Summary

American Public Education beats K12 on 8 of the 13 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.