Analyst Matthew Litkin says the company is benefiting from economic uncertainty as more people look to bolster education.
He says Q3 enrollment growth was higher than his expectations, and he thinks Q3 results prove why the company is a leader in the education space. Litkin notes Apollo is guiding Q4 estimates up.
He says the company's University of Phoenix on-line programs is the brand of choice for on-line education, and says he will raise the $0.96 fiscal 2002 (Aug.) EPS estimate by at least $0.10, and probably more. He also will raise the $900 million fiscal 2002 revenue estimate to the $930 million to $935 million range.
Litkin thinks the stock should trade at $40-$45 based on 40 times the fiscal 2002 EPS estimate. He rates the stock a buy.