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Aspen Group, Inc. Just Reported Third-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

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As you might know, Aspen Group, Inc. (NASDAQ:ASPU) just kicked off its latest third-quarter results with some very strong numbers. Results overall were solid, with revenues arriving 2.9% better than analyst forecasts at US$13m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.12 per share, were 2.9% smaller than analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.

Check out our latest analysis for Aspen Group

NasdaqGM:ASPU Past and Future Earnings, March 13th 2020
NasdaqGM:ASPU Past and Future Earnings, March 13th 2020

Following the latest results, Aspen Group's five analysts are now forecasting revenues of US$62.3m in 2021. This would be a major 38% improvement in sales compared to the last 12 months. Per-share statutory losses are expected to explode, reaching US$0.064 per share. Before this latest report, the consensus had been expecting revenues of US$62.0m and US$0.02 per share in losses. So there's definitely been a decline in analyst sentiment after the latest results, noting the large cut to new EPS forecasts.

The consensus price target held steady at US$11.40, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Aspen Group at US$12.00 per share, while the most bearish prices it at US$11.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.

Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. We can infer from the latest estimates that analysts are expecting a continuation of Aspen Group's historical trends, as next year's forecast 38% revenue growth is roughly in line with 41% annual revenue growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 19% next year. So although Aspen Group is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider market.

The Bottom Line

The most important thing to take away is that analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at US$11.40, with the latest estimates not enough to have an impact on analysts' estimated valuations.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Aspen Group going out to 2024, and you can see them free on our platform here.

You can also see our analysis of Aspen Group's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.