Summary
- The stock is going to soon reach $20+.
- A potential catalyst around January 5th, 2021 in the form of NCLEX test results could send the shares up.
- Even if the result is less than optimal, the company can course-correct in 2021 with minimal damage.
- This makes me believe Aspen's shares present little risk with high reward.
Company
Aspen Group (ASPU) is a for-profit higher education company that focuses on the nursing sector. Its programs include the legacy pure-online programs for nurses who already possess their nursing license, as well as the following two newer programs with much higher price points which the company is scaling rapidly:
- Family Nurse Practitioner (FNP) - Which is done online with a couple of on campus immersions throughout the program.
- Pre-licensure / Hybrid - Which is a hybrid online (70%) / offline (30%) program to receive a bachelor's degree in nursing. This is the only program the company offers in the nursing sector for student without a nursing license.
The Opportunity
I have been following the company very closely over the past few years. In September 2019, I informed the Seeking Alpha community that ASPU is inflecting, as I concluded the pre-licensure program should be extremely profitable. The stock price at the time was $4.74, and you can read the article here. Later, in March 2020, when the market was crashing, I explained my views that COVID-19 will be a positive for ASPU in this article. The price at the time was $6.34. Both articles proved me right, as the stock is now trading comfortably at $12 per share.
I now want to let the community know that I believe ASPU is making its next leg up towards $20+, and now would be a good time to buy.
Why Now?
This article will focus on the pre-licensure program, as it is the most valuable for the company. ASPU has already opened 4 campuses in the last couple of years. By now, it is pretty obvious these campuses should be very profitable if allowed to scale, and there is one last obstacle to overcome in order to secure that fast scaling: the NCLEX exam.
The NCLEX (or National Council Licensure Examination) is a test needed to be passed to receive one's nursing license. Each campus opened is given the ability to enroll a limited number of students (each state with its own different limitations). The campuses themselves have a higher capacity, but they will not be allowed to scale until they prove their graduates can actually pass the NCLEX exam to become nurses.
