DA Davidson on Wednesday increased its target price for American Public Education (NASDAQ: APEI) to $48.00, up from $43.00, and retained a Buy recommendation on the education-services provider's shares. The new target sits near InvestingPro's Fair Value estimate, which indicates the stock is slightly undervalued at its current trading level of $41.59.
The analyst action follows President Trump signing a funding bill that concluded the recent partial government shutdown. The measure funds the Department of Education through the end of the fiscal year and also supplies appropriations for the Pentagon, the Treasury Department, the Labor Department and the State Department. DA Davidson said the bill removes a "material overhang" that had been pressuring APEI's stock, noting that concerns about the prospect of another drawn-out shutdown had been a drag despite the shares' recent outperformance.
DA Davidson described the stock as "well-positioned for a period of further outperformance" and cited recent market returns as evidence of momentum. According to InvestingPro data cited by the firm, APEI has returned 89.13% over the past year and 38.91% over the last six months.
The firm highlighted several specific business drivers expected to support the company this year:
- Leadership in the military education segment, which remains a core area of demand for the company.
- Profitability improvements at the Rasmussen University unit, which DA Davidson flagged as a recent positive development.
- An emphasis on degree programs the firm views as resilient to automation and AI disruption, with a particular focus on nursing.
Operationally, APEI reported revenue growth of 6.75% over the last twelve months. Analysts' consensus also points to continued profitability, with a forecasted earnings per share of $1.96 for fiscal 2025.
DA Davidson drew attention to moves that have bolstered the company’s balance sheet. Those include the sale of two administrative buildings, a reclassification of $24.5 million into unrestricted cash, and the redemption of $43 million in preferred equity. InvestingPro's data corroborated the improved liquidity position, showing a current ratio of 2.84 and an Altman Z-Score of 4.17, which the Pro analysis interprets as indicating a low risk of bankruptcy.
On valuation, the new $48 price target translates to roughly 8.5 times DA Davidson’s 2026 EV/EBITDA estimate. That stands in contrast to the company’s current EV/EBITDA multiple of 9.83 as reported by InvestingPro, indicating that DA Davidson’s target reflects a lower multiple applied to expected 2026 profit levels.
InvestingPro also offers further investor resources on the company, listing 13 additional tips related to APEI’s valuation metrics and growth prospects, and providing a comprehensive Pro Research Report for subscribers seeking more detailed analysis.
Recent company disclosures and third-party ratings lend further context to the analyst’s stance. American Public Education posted third-quarter 2025 results that materially beat Street expectations, reporting earnings per share of $0.30 compared with a forecast of $0.08, and revenue of $163.2 million versus an expected $160.1 million. Credit agency Moody’s upgraded APEI’s corporate family rating from B2 to B1, citing sustained revenue growth and margin expansion. Moody’s also raised the company’s probability of default rating and its senior secured credit facility rating to B1.
On the product and partnership front, American Public University System, a subsidiary of American Public Education, signed a licensing agreement with the Massachusetts Institute of Technology’s Computer Science and Artificial Intelligence Laboratory to offer new AI-related courses.
On the sell-side, Truist Securities raised its price target on APEI to $38 from $35 while maintaining a Hold rating after the company’s investor day. Truist had previously moved its target up from $30 to $35, citing third-quarter results that beat expectations and positive guidance for the fourth quarter.
Overall, DA Davidson’s target increase and the company’s recent operational and financial developments present a case the firm views as supportive of additional share-price appreciation. The analyst’s view ties directly to the removal of near-term political risk through the funding bill, ongoing improvement at key business segments and a stronger liquidity profile following asset sales and capital reclassification.