Aspen Group, Inc.'s (NASDAQ:ASPU) Shift From Loss To Profit

Aspen Group, Inc. (NASDAQ:ASPU) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Aspen Group, Inc., an education technology company, provides online higher education services in the United States. The US$169m market-cap company posted a loss in its most recent financial year of US$5.7m and a latest trailing-twelve-month loss of US$8.8m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is Aspen Group's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

Check out our latest analysis for Aspen Group

According to the 6 industry analysts covering Aspen Group, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$8.0m in 2023. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 75% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Aspen Group's upcoming projects, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we’d like to point out is that Aspen Group has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Aspen Group, so if you are interested in understanding the company at a deeper level, take a look at Aspen Group's company page on Simply Wall St. We've also put together a list of relevant aspects you should further research:

1. Valuation: What is Aspen Group worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Aspen Group is currently mispriced by the market.
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 background.
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.

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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.
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