Aspen Group, Inc. (NASDAQ:ASPU) Released Earnings Last Week And Analysts Lifted Their Price Target To US$14.67

As you might know, Aspen Group, Inc. (NASDAQ:ASPU) just kicked off its latest first-quarter results with some very strong numbers. Revenues and losses per share were both better than expected, with revenues of US$15m leading estimates by 6.6%. Statutory losses were smaller than the analystsexpected, coming in at US$0.04 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Aspen Group

Taking into account the latest results, the consensus forecast from Aspen Group's six analysts is for revenues of US$65.6m in 2021, which would reflect a major 22% improvement in sales compared to the last 12 months. Losses are expected to increase slightly, to US$0.23 per share. Before this earnings announcement, the analysts had been modelling revenues of US$64.5m and losses of US$0.11 per share in 2021. While this year's revenue estimates held steady, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

Despite expectations of heavier losses next year,the analysts have lifted their price target 6.0% to US$14.67, perhaps implying these losses are not expected to be recurring over the long term. 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. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Aspen Group is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Aspen Group's revenue growth is expected to slow, with forecast 22% increase next year well below the historical 40%p.a. growth over the last five years. Compare this to the 81 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 21% per year. So it's pretty clear that, while Aspen Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

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. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 forecasts for Aspen Group 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 3 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 editorial-team@simplywallst.com.