American Public Education (APEI) offers lower tuition to students and offers programs that are of interest to prospective employers, while at the same time serving a very strong military niche market, says Peter P. Appert, Managing Director and Senior Research Analyst at Piper Jaffray & Co.
“In the case of APEI, their point of differentiation is really price. They have the lowest tuition rates of any of the for-profit institutions. They basically are competing, from a pricing perspective, with community colleges. If I’m paying $650 a credit at many of the for-profit institutions, the tuition rate at APEI is $250 a credit,” Appert said.
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Appert says APEI‘s highly differentiated business model has allowed the company to grow earnings and enrollment despite a general malaise in the education industry.
“It’s the ability to identify those niche areas and dominate them that has worked for these companies and enabled them to post impressive enrollment growth, even as the industry has been shrinking. And that’s been the key from the perspective of sustainability of earnings growth and the key in terms of superior investment performance,” Appert said.