In a report released yesterday, Darren Aftahi from Roth Capital maintained a Buy rating on Aspen Group Inc (ASPU), with a price target of $9.50. The company’s shares closed yesterday at $4.06, close to its 52-week low of $3.58.
“We remain positive on longer-term growth and profit prospects for ASPU, and are encouraged by its new USU payment plan impact on FY21 cash flow, but highlight cash burn ($3.4M in 4Q) remains a concern and could temper share appreciation (despite improving outlook), inclusive of ~mid 20% topline growth and positive FY20 adj. EBITDA guide. What to do with the stock? 4Q results were positive, showcasing continued growth and operating leverage, as was forward outlook for FY20 adj. EBITDA profitability. However, given ~$3.4M in Q cash burn and continued investment in new businesses (namely additional campuses), share appreciation could be tempered. The augmentation to USU’s monthly payment plan (to facilitate faster repayment and thus cash flow) is a net positive in our view, however its major impact is still a FY21 event at best.”
According to TipRanks.com, Aftahi is a 5-star analyst with an average return of 15.4% and a 51.9% success rate. Aftahi covers the Technology sector, focusing on stocks such as Digital Turbine Inc, The Meet Group Inc, and Mitek Systems Inc.
Currently, the analyst consensus on Aspen Group Inc is a Moderate Buy with an average price target of $9.50.
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Based on Aspen Group Inc’s latest earnings release for the quarter ending April 30, the company reported a quarterly GAAP net loss of $1.61 million. In comparison, last year the company had a GAAP net loss of $3.66 million.
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Aspen Group, Inc. is a holding company, which engages in the provision of education. It operates through its subsidiary Aspen University and United States University.