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Bull Of The Day: Aspen Group (ASPU)

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Aspen Group (ASPU - Free Report) is a Zacks Rank #1 (Strong Buy) with some low Zacks Style Scores, but there is something to this stock. Yesterday, it rose more than 9% as increased significantly. Let’s take a look at why investors are sending shares of ASPU up in a big way in this Bull of the Day article.

Description

Aspen Group, Inc. is an online post-secondary education company. It offers certificate programs and associate, bachelor, master, and doctoral degree programs in a range of areas, including business and organization management, education, nursing, information technology, and general studies. Aspen Group, Inc. is headquartered in Denver, Colorado.

Recent Earnings

The most recent earnings report was a very good one. The company posted a loss of 3 cents when the Zacks Consensus Estimate was calling for a loss of 7 cents. That four cent difference was good for a 57% positive earnings surprise. Investors love to see that and the also tells us that the move to profitability is not too far off.

Estimate Movement

I see the estimate are moving in the right direction for ASPU. The current quarter as moved from a loss of 7 cents 90 days ago to a loss of 5 cents. The next quarter has also seen a nice bump up in number from a loss of four cents to two cents.

The fiscal year 2020 has moved from a loss of 29 cent to a loss of 22 cents, so still some work to do there.

The real story here is the fiscal 2021 numbers. They moved from a loss of two cents to a gain of two cents over the last 60 days.

So the pathway to profitability is there, the question really becomes when does the company turn the corner? There is a good chance it happens longs before the 2021 fiscal year.

Valuation

Losses for this internet services company are shrinking and the topline has some outstanding growth. I see 49% year over year growth and that is buoyed by 16.7% sequential growth. That is great to see and will push this company to profitability in a few quarters.

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