Investopedia: Apollo Off Key For Growth Investors

These are challenging days for the for-profit education market. Although a tough job market may suggest a larger pool of potential students, education companies are up against a formidable set of challenges. Education has gotten increasingly expensive (pricing some out of the market), the job outlook may lead people to think further education is pointless, and new government regulations have these companies reconsidering and adjusting their admissions and promotions policies.


With that backdrop, it is not altogether surprising that Apollo Group (Nasdaq:APOL) is struggling. While the long-term view on this company is still quite positive, the institutional investors that move markets these days are not famous for patience and the near-term outlook is troublesome.

A Tough Third Quarter
Apollo did reasonably well, relative to expectations, but the company's absolute fiscal third quarter performance was not very strong. Revenue fell close to 8% this quarter, as starts dropped about 40% and enrollment fell about 16%. Apollo saw the biggest drops in its associate programs, but there really wasn't an area of strength. While these declines were already in the analysts' models (and caused at least in part by new orientation and admissions models), it is still a major interruption in the company's growth trajectory.



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