- Oops!Something went wrong.Please try again later.
Investors in Aspen Group, Inc. (NASDAQ:ASPU) had a good week, as its shares rose 3.0% to close at US$11.49 following the release of its quarterly results. Sales of US$17m came in 8.7% ahead of expectations, although statutory earnings didn't fare nearly so well, recording a loss of US$0.19, a 16% miss. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the most recent consensus for Aspen Group from five analysts is for revenues of US$67.8m in 2021 which, if met, would be a solid 15% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 21% to US$0.30. Before this earnings announcement, the analysts had been modelling revenues of US$66.4m and losses of US$0.26 per share in 2021. While this year's revenue estimates increased, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The consensus price target stayed unchanged at US$14.83, seeming to suggest that higher forecast losses are not expected to have a long term impact on the valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Aspen Group at US$16.00 per share, while the most bearish prices it at US$14.00. This is a very narrow spread of estimates, implying either that Aspen Group is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Aspen Group's revenue growth will slow down substantially, with revenues next year expected to grow 15%, compared to a historical growth rate of 39% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 24% next year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Aspen Group.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Aspen Group. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Aspen Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Aspen Group analysts - going out to 2024, and you can see them free on our platform here.
You still need to take note of risks, for example - Aspen Group has 2 warning signs we think you should be aware of.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.