U.S. Markets closed

Aspen Group, Inc.'s (NASDAQ:ASPU) Path To Profitability

Simply Wall St

Aspen Group, Inc.'s (NASDAQ:ASPU): Aspen Group, Inc. provides online higher education services in the United States. With the latest financial year loss of -US$9.3m and a trailing-twelve month of -US$8.5m, the US$123m market-cap alleviates its loss by moving closer towards its target of breakeven. As path to profitability is the topic on ASPU’s investors mind, I’ve decided to gauge market sentiment. In this article, I will touch on the expectations for ASPU’s growth and when analysts expect the company to become profitable.

Check out our latest analysis for Aspen Group

According to the 5 industry analysts covering ASPU, the consensus is breakeven is near. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$2.2m in 2022. So, ASPU is predicted to breakeven approximately 3 years from today. How fast will ASPU have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 70% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, ASPU may become profitable much later than analysts predict.

NasdaqGM:ASPU Past and Future Earnings, November 9th 2019

Given this is a high-level overview, I won’t go into details of ASPU’s upcoming projects, though, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I’d like to point out is that ASPU has managed its capital judiciously, with debt making up 39% of equity. This means that ASPU has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of ASPU which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at ASPU, take a look at ASPU’s company page on Simply Wall St. I’ve also put together a list of essential factors you should further research:

  1. Historical Track Record: What has ASPU's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aspen Group’s board and the CEO’s back ground.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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.

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. Thank you for reading.