When Will Aspen Group, Inc. (NASDAQ:ASPU) Turn A Profit?

We feel now is a pretty good time to analyse Aspen Group, Inc.'s (NASDAQ:ASPU) business as it appears the company may be on the cusp of a considerable accomplishment. Aspen Group, Inc., an education technology company, provides online higher education services in the United States. With the latest financial year loss of US$5.7m and a trailing-twelve-month loss of US$4.5m, the US$275m market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Aspen Group's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Aspen Group

Consensus from 6 of the American Consumer Services analysts is that Aspen Group is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$2.5m in 2022. Therefore, the company is expected to breakeven roughly 2 years from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 88% is expected, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Aspen Group given that this is a high-level summary, however, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one aspect worth mentioning. The company has managed its capital prudently, with debt making up 20% of equity. This means that it 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 Aspen Group which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Aspen Group, take a look at Aspen Group's company page on Simply Wall St. We've also compiled a list of essential aspects you should further examine:

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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