Shares of Aspen Group fell 6.6% in the extended trading session on Tuesday as the education technology company reported a higher-than-expected loss for the fiscal second quarter (ended Oct. 31) despite strong revenue growth.
Aspen’s (ASPU) 2Q FY21 revenue increased 40% year-over-year to $17.0 million, exceeding analysts’ forecast of $15.6 million. The top line was driven by enrollment and student body growth in USU’s (United States University) MSN-FNP program and Aspen’s BSN Pre-Licensure program, the degree programs with the highest lifetime value (LTV).
However, the company’s adjusted loss per share widened to $0.05 in 2Q FY21 from $0.01 in 2Q FY20, and was also higher than analysts’ consensus of a loss per share of $0.03. The bottom line was impacted by higher marketing expenditure, investments in the expansion of the company’s enrollment center and the launch of new campuses in Austin, Texas, and Tampa, Florida. (See ASPU stock analysis on TipRanks)
Looking ahead, the company expects FY21 revenue to grow 38% to $67.7 million, with 3Q and 4Q revenue estimated at about $16.6 million and $19 million, respectively.
Following the announcement of the preliminary 2Q results last month, Roth Capital analyst Darren Aftahi reiterated a Buy rating on Aspen with a $15 price target. In a note to investors, Aftahi stated, “we see upside to revenue/profitability for 2Q and plan to further update our model post 2Q results.”
Overall, Aspen Group scores the Street’s Strong Buy analyst consensus based on 4 unanimous Buys. The average price target stands at $14.50 and reflects an upside potential of 22% in the months ahead. Shares have already surged by an impressive 48.8% year-to-date.
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