Education technology company Aspen Group, Inc. (ASPU) recently reported lower-than-expected performance for the second quarter on both its top-line and bottom-line fronts.
Revenue increased 11.6% year-over-year to $18.9 million, but fell short of estimates by $1 million. Net loss per share at $0.11 came in wider than analysts’ expectations by $0.05. During the quarter, Aspen witnessed a slower pace of enrollments and class starts.
At the end of Q2, nursing students made up 87% of Aspen’s total student body. Management noted that current dynamics in the nursing sector favor Aspen’s business model. Nursing shortages and RNs seeking movement to private clinics are expected to be the drivers for the company’s nursing program.
With these developments in mind, let us take a look at the changes in Aspen’s key risk factors that investors should know.
Risk Factors
According to the TipRanks Risk Factors tool, Aspen’s top two risk categories are Legal & Regulatory and Finance & Corporate, contributing 42% and 18% to the total 60 risks identified, respectively. Compared to a sector average of 17%, Aspen’s Legal & Regulatory risk factor is at 42%.
In its recent quarterly report, the company has added one key risk factor under the Production risk category.
Aspen noted that regulations and directives regarding mandatory COVID-19 vaccination of employees could have a negative impact on Aspen. It could lead to employee attrition, impacting Aspen’s future revenue and costs. (See Insiders’ Hot Stocks on TipRanks)
Wall Street’s Take
On December 15, Craig-Hallum analyst Jeremy Hamblin decreased the rating on the stock to Hold from Buy. The analyst’s price target of $3.50 implies a potential upside of 73.3% for Aspen.
Consensus on the Street is a Moderate Buy based on 1 Buy and 2 Holds for the stock. The average Aspen price target of $5.17 implies a potential upside of 155.9%. That’s after an 81.4% decline in Aspen’s share price over the past year.
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