New York, NY / ACCESSWIRE / October 16, 2014 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced that it has initiated coverage on Aspen Group, Inc. (OTCQB: ASPU). Aspen is an online post-secondary education provider offering students 65 degree programs, and is primarily a graduate university today given that 87% of its degree-seeking students are enrolled in either a Master or Doctoral program. The company’s largest program is its Master of Science in Nursing (MSN) program and the university is awaiting notification of its nursing accreditation approval in November for its Bachelor of Science in Nursing (BSN) program which presents the biggest growth opportunity going forward.
"We believe the company’s affordable, debtless education business model is compelling," stated Ajay Tandon, CEO of SeeThruEquity. "The company is awaiting notification of its nursing accreditation approval in the next thirty days for its BSN program which presents the biggest growth opportunity going forward. It is also encouraging to see a number of well-known investors in a microcap company of this size. We are initiating coverage with a target price of $0.66."
Additional investment highlights are as follows:
Exclusive Low-Cost Online Education Provider
Aspen provides affordable online education offering tuition rates which are half the cost of its competitors as part of its mission to provide debtless higher education. Aspen charge $125 per credit for bachelor or associate degrees and $325 per credit for master, doctoral and certificate programs. The company’s recently introduced pay-as-you-go facility (monthly payment plans) eliminates the need for its students to acquire high debt by offering bachelor students the opportunity to pay $250 each month while master/doctoral students can pay $325 each month over the program duration. Within five months after announcement, over 24% of courses are now paid for through the monthly plan.
Rising tuition & student debt trap favor inexpensive online education
Online education presents an enormous opportunity with an estimated market size of $27 billion by 2019. According to IEPDS data, 2.6 million students enrolled for fully-online programs during fall 2012 (representing 11.3% of overall enrollments), of which 0.9 million enrolled in private four year for-profit schools. Meanwhile, the overall for-profit education business worth an estimated $23 billion is witnessing change due to rising tuition rates and student debt defaults. Tuition rates at for-profit four year schools have increased 25% over the past decade and financial aid has not kept pace with the growth in tuition rates which has indebted students and their families. For-profit institutions reported the highest average three-year cohort default rates of 21.8% for borrowers who began repayment during the 2010 fiscal year. These factors point to a growing market for inexpensive online education which Aspen aims to capture.
Opportunity in Nursing education to drive Incremental Growth
Aspen is currently focused on growing its School of Nursing which intends to capture a share of the $17 billion opportunity presented by the projected increase in the nursing workforce as a result of the increased healthcare spending and the expected retirement of a large portion of the current registered nurses (RN) workforce in the near future. Nearly 75% of the growth in Aspen’s student enrollment over the past year are attributable to the nursing program which has seen its student enrollment grow to 920 within 2.5 years of launch and currently contributes to 34% of total revenues. In addition, the company anticipates receiving notification of approval of its BSN program during November 2014. The market opportunity in this undergraduate field is estimated to be 5-10 times the opportunity of the MSN program.
High Margin Business Model
Aspen relies entirely on its management expertise in internet marketing and lead generation and does not utilize third party lead generation firms which has resulted in low enrollment cost per student of $557, among the lowest in the industry by a significant margin, with a healthy lead conversion rate of 8.2%. Its teaching costs which stand at $160 per course completion are completely variable and gross margins are expected to increase substantially going forward after Aspen achieves a certain minimum scale of student enrollments.
The report is available here: ASPU Initiation Report. SeeThruEquity is an approved equity research contributor on Thomson First Call, Capital IQ, FactSet, and Zack’s. The report will also be available on these platforms.
Please review important disclosures on our website at www.seethruequity.com.
About Aspen Group, Inc.
Aspen Group, Inc. is an online post-secondary education company. The Company derives revenue primarily from tuition and fees derived from courses taught by the Company online, as well as from related educational resources that the Company provides to its students, such as access to its online materials and learning management system. The Company’s subsidiary, Aspen University Inc. offers students 65 degree programs, specializations, completion programs and certificates in a range of areas, including business and organization management, education, nursing, information technology, general studies and more.
For more information, visit www.aspen.edu.
About SeeThruEquity
SeeThruEquity is an equity research and corporate access firm focused on companies with less than $1 billion in market capitalization. The research is not paid for and is unbiased. We do not conduct any investment banking or commission based business. We are approved to contribute our research to Thomson One Analytics (First Call), Capital IQ, FactSet, Zacks and distribute our research to our database of opt-in investors. We also contribute our estimates to Thomson Estimates, the leading estimates platform on Wall Street.
For more information visit www.seethruequity.com.
Contact:
Ajay Tandon
SeeThruEquity
(646) 495-0939
SOURCE: SeeThruEquity