Intrinsic value of Aspen Group - ASPU

Previous Close

$5.22

  Intrinsic Value

$0.26

stock screener

  Rating & Target

str. sell

-95%

Previous close

$5.22

 
Intrinsic value

$0.26

 
Up/down potential

-95%

 
Rating

str. sell

We calculate the intrinsic value of ASPU stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  35
  54
  81
  118
  167
  229
  308
  404
  520
  656
  815
  996
  1,201
  1,429
  1,680
  1,954
  2,251
  2,570
  2,911
  3,273
  3,656
  4,058
  4,481
  4,923
  5,386
  5,868
  6,369
  6,892
  7,435
  7,999
Variable operating expenses, $m
  36
  55
  81
  117
  164
  226
  302
  396
  510
  643
  797
  974
  1,174
  1,397
  1,643
  1,911
  2,201
  2,513
  2,847
  3,200
  3,574
  3,968
  4,382
  4,814
  5,266
  5,738
  6,228
  6,739
  7,270
  7,822
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  36
  55
  81
  117
  164
  226
  302
  396
  510
  643
  797
  974
  1,174
  1,397
  1,643
  1,911
  2,201
  2,513
  2,847
  3,200
  3,574
  3,968
  4,382
  4,814
  5,266
  5,738
  6,228
  6,739
  7,270
  7,822
Operating income, $m
  -1
  0
  0
  1
  2
  4
  5
  7
  10
  13
  18
  22
  27
  32
  37
  43
  50
  57
  65
  73
  81
  90
  99
  109
  119
  130
  141
  153
  165
  177
EBITDA, $m
  2
  3
  4
  6
  9
  12
  16
  21
  27
  35
  43
  52
  63
  75
  88
  103
  118
  135
  153
  172
  192
  214
  236
  259
  283
  309
  335
  363
  391
  421
Interest expense (income), $m
  0
  4
  12
  23
  39
  61
  89
  126
  173
  230
  298
  379
  472
  580
  701
  835
  984
  1,146
  1,321
  1,510
  1,711
  1,925
  2,151
  2,389
  2,639
  2,900
  3,173
  3,458
  3,755
  4,063
  4,384
Earnings before tax, $m
  -5
  -12
  -23
  -38
  -58
  -86
  -121
  -165
  -219
  -285
  -361
  -450
  -553
  -669
  -798
  -940
  -1,096
  -1,264
  -1,445
  -1,638
  -1,844
  -2,061
  -2,290
  -2,530
  -2,781
  -3,043
  -3,317
  -3,602
  -3,898
  -4,207
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -5
  -12
  -23
  -38
  -58
  -86
  -121
  -165
  -219
  -285
  -361
  -450
  -553
  -669
  -798
  -940
  -1,096
  -1,264
  -1,445
  -1,638
  -1,844
  -2,061
  -2,290
  -2,530
  -2,781
  -3,043
  -3,317
  -3,602
  -3,898
  -4,207

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  52
  80
  120
  174
  246
  338
  454
  596
  768
  969
  1,204
  1,472
  1,774
  2,111
  2,482
  2,887
  3,326
  3,797
  4,300
  4,835
  5,400
  5,995
  6,619
  7,273
  7,955
  8,667
  9,408
  10,180
  10,982
  11,815
Adjusted assets (=assets-cash), $m
  52
  80
  120
  174
  246
  338
  454
  596
  768
  969
  1,204
  1,472
  1,774
  2,111
  2,482
  2,887
  3,326
  3,797
  4,300
  4,835
  5,400
  5,995
  6,619
  7,273
  7,955
  8,667
  9,408
  10,180
  10,982
  11,815
Revenue / Adjusted assets
  0.673
  0.675
  0.675
  0.678
  0.679
  0.678
  0.678
  0.678
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
  0.677
Average production assets, $m
  9
  15
  22
  32
  45
  61
  82
  108
  139
  176
  218
  267
  322
  383
  450
  524
  603
  689
  780
  877
  980
  1,088
  1,201
  1,319
  1,443
  1,573
  1,707
  1,847
  1,992
  2,144
Working capital, $m
  2
  4
  5
  8
  11
  15
  20
  27
  34
  43
  54
  66
  79
  94
  111
  129
  149
  170
  192
  216
  241
  268
  296
  325
  355
  387
  420
  455
  491
  528
Total debt, $m
  6
  12
  20
  32
  47
  66
  90
  120
  156
  198
  247
  303
  366
  436
  514
  599
  690
  789
  894
  1,006
  1,124
  1,248
  1,379
  1,515
  1,658
  1,807
  1,962
  2,123
  2,290
  2,465
Total liabilities, $m
  11
  17
  25
  36
  51
  71
  95
  125
  160
  203
  252
  308
  371
  441
  519
  603
  695
  794
  899
  1,010
  1,129
  1,253
  1,383
  1,520
  1,663
  1,811
  1,966
  2,128
  2,295
  2,469
Total equity, $m
  41
  64
  95
  138
  195
  268
  359
  472
  607
  767
  952
  1,164
  1,403
  1,670
  1,963
  2,284
  2,630
  3,003
  3,401
  3,824
  4,271
  4,742
  5,236
  5,753
  6,293
  6,856
  7,442
  8,052
  8,687
  9,346
Total liabilities and equity, $m
  52
  81
  120
  174
  246
  339
  454
  597
  767
  970
  1,204
  1,472
  1,774
  2,111
  2,482
  2,887
  3,325
  3,797
  4,300
  4,834
  5,400
  5,995
  6,619
  7,273
  7,956
  8,667
  9,408
  10,180
  10,982
  11,815
Debt-to-equity ratio
  0.150
  0.190
  0.210
  0.230
  0.240
  0.250
  0.250
  0.250
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
Adjusted equity ratio
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791
  0.791

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -5
  -12
  -23
  -38
  -58
  -86
  -121
  -165
  -219
  -285
  -361
  -450
  -553
  -669
  -798
  -940
  -1,096
  -1,264
  -1,445
  -1,638
  -1,844
  -2,061
  -2,290
  -2,530
  -2,781
  -3,043
  -3,317
  -3,602
  -3,898
  -4,207
Depreciation, amort., depletion, $m
  3
  3
  4
  5
  7
  8
  11
  14
  17
  21
  25
  30
  37
  44
  51
  60
  69
  78
  89
  100
  111
  124
  136
  150
  164
  179
  194
  210
  226
  244
Funds from operations, $m
  -2
  -9
  -19
  -33
  -52
  -77
  -110
  -151
  -202
  -263
  -336
  -420
  -516
  -625
  -747
  -881
  -1,027
  -1,186
  -1,357
  -1,539
  -1,732
  -1,937
  -2,153
  -2,380
  -2,617
  -2,864
  -3,123
  -3,392
  -3,672
  -3,963
Change in working capital, $m
  1
  1
  2
  2
  3
  4
  5
  6
  8
  9
  10
  12
  14
  15
  17
  18
  20
  21
  22
  24
  25
  27
  28
  29
  31
  32
  33
  34
  36
  37
Cash from operations, $m
  -3
  -10
  -21
  -35
  -55
  -81
  -115
  -158
  -210
  -272
  -346
  -432
  -530
  -640
  -763
  -899
  -1,047
  -1,207
  -1,379
  -1,563
  -1,758
  -1,964
  -2,181
  -2,409
  -2,647
  -2,896
  -3,156
  -3,426
  -3,708
  -4,000
Maintenance CAPEX, $m
  -1
  -1
  -2
  -2
  -4
  -5
  -7
  -9
  -12
  -16
  -20
  -25
  -30
  -37
  -44
  -51
  -60
  -69
  -78
  -89
  -100
  -111
  -124
  -136
  -150
  -164
  -179
  -194
  -210
  -226
New CAPEX, $m
  -4
  -5
  -7
  -10
  -13
  -17
  -21
  -26
  -31
  -37
  -43
  -49
  -55
  -61
  -67
  -74
  -80
  -86
  -91
  -97
  -103
  -108
  -113
  -119
  -124
  -129
  -135
  -140
  -146
  -151
Cash from investing activities, $m
  -5
  -6
  -9
  -12
  -17
  -22
  -28
  -35
  -43
  -53
  -63
  -74
  -85
  -98
  -111
  -125
  -140
  -155
  -169
  -186
  -203
  -219
  -237
  -255
  -274
  -293
  -314
  -334
  -356
  -377
Free cash flow, $m
  -7
  -16
  -29
  -48
  -72
  -103
  -143
  -193
  -253
  -325
  -409
  -505
  -615
  -738
  -874
  -1,024
  -1,186
  -1,361
  -1,549
  -1,748
  -1,960
  -2,183
  -2,418
  -2,664
  -2,921
  -3,189
  -3,469
  -3,760
  -4,063
  -4,378
Issuance/(repayment) of debt, $m
  4
  6
  8
  11
  15
  19
  24
  30
  36
  42
  49
  56
  63
  70
  78
  85
  92
  99
  105
  112
  118
  124
  131
  137
  143
  149
  155
  161
  168
  174
Issuance/(repurchase) of shares, $m
  20
  34
  54
  81
  115
  159
  213
  278
  355
  445
  546
  662
  792
  935
  1,092
  1,261
  1,443
  1,637
  1,843
  2,061
  2,291
  2,532
  2,783
  3,046
  3,321
  3,606
  3,903
  4,212
  4,533
  4,866
Cash from financing (excl. dividends), $m  
  24
  40
  62
  92
  130
  178
  237
  308
  391
  487
  595
  718
  855
  1,005
  1,170
  1,346
  1,535
  1,736
  1,948
  2,173
  2,409
  2,656
  2,914
  3,183
  3,464
  3,755
  4,058
  4,373
  4,701
  5,040
Total cash flow (excl. dividends), $m
  17
  24
  33
  45
  58
  75
  94
  114
  137
  162
  186
  213
  240
  268
  295
  322
  348
  374
  400
  425
  449
  473
  496
  519
  542
  566
  589
  613
  637
  662
Retained Cash Flow (-), $m
  -20
  -34
  -54
  -81
  -115
  -159
  -213
  -278
  -355
  -445
  -546
  -662
  -792
  -935
  -1,092
  -1,261
  -1,443
  -1,637
  -1,843
  -2,061
  -2,291
  -2,532
  -2,783
  -3,046
  -3,321
  -3,606
  -3,903
  -4,212
  -4,533
  -4,866
Prev. year cash balance distribution, $m
  8
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  5
  -10
  -21
  -36
  -57
  -84
  -119
  -163
  -217
  -283
  -360
  -449
  -552
  -668
  -797
  -939
  -1,094
  -1,263
  -1,443
  -1,637
  -1,842
  -2,059
  -2,287
  -2,527
  -2,778
  -3,041
  -3,314
  -3,599
  -3,895
  -4,204
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  5
  -10
  -18
  -30
  -44
  -61
  -80
  -102
  -125
  -148
  -171
  -192
  -210
  -224
  -234
  -239
  -238
  -233
  -222
  -208
  -191
  -171
  -150
  -129
  -108
  -89
  -71
  -56
  -43
  -32
Current shareholders' claim on cash, %
  78.4
  60.5
  46.5
  35.8
  27.7
  21.5
  16.8
  13.2
  10.4
  8.3
  6.6
  5.3
  4.3
  3.5
  2.8
  2.3
  1.9
  1.5
  1.3
  1.0
  0.9
  0.7
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.2

Aspen Group, Inc. is a holding company. The Company's subsidiary, Aspen University Inc. (Aspen), is dedicated to provide the education experiences taught by professors. Aspen offers approximately two monthly payment programs, a monthly payment plan in which students make payments every month over a fixed period (36, 39 or 72 months depending on the degree program) and a monthly installment plan in which students pay over three monthly installments (day 1, day 31 and day 61 after the start of each course). As of June 30, 2016, Aspen had 2,074 students paying tuition through either of the monthly payment methods. It offers certificate programs and associate, bachelor's, master's and doctoral degree programs in a range of areas, including nursing, business, education and professional studies. It offers a range of nursing degrees, including Master of Science in Nursing, Master of Science in Nursing-Nursing Education and Master of Science in Nursing-Nursing Administration and Management.

FINANCIAL RATIOS  of  Aspen Group (ASPU)

Valuation Ratios
P/E Ratio -70.5
Price to Sales 5
Price to Book 8.8
Price to Tangible Book
Price to Cash Flow -70.5
Price to Free Cash Flow -35.2
Growth Rates
Sales Growth Rate 75%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -12.5%
Ret/ On Assets - 3 Yr. Avg. -43%
Return On Total Capital -18.2%
Ret/ On T. Cap. - 3 Yr. Avg. -60.8%
Return On Equity -20%
Return On Equity - 3 Yr. Avg. -300%
Asset Turnover 1.8
Profitability Ratios
Gross Margin 64.3%
Gross Margin - 3 Yr. Avg. 62.3%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. -24.2%
Operating Margin -7.1%
Oper. Margin - 3 Yr. Avg. -41.5%
Pre-Tax Margin -7.1%
Pre-Tax Margin - 3 Yr. Avg. -37.4%
Net Profit Margin -7.1%
Net Profit Margin - 3 Yr. Avg. -37.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

ASPU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ASPU stock intrinsic value calculation we used $22.021512 million for the last fiscal year's total revenue generated by Aspen Group. The default revenue input number comes from 0001 income statement of Aspen Group. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ASPU stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ASPU is calculated based on our internal credit rating of Aspen Group, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Aspen Group.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ASPU stock the variable cost ratio is equal to 104.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ASPU stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 191.4% for Aspen Group.

Corporate tax rate of 27% is the nominal tax rate for Aspen Group. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ASPU stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ASPU are equal to 26.8%.

Life of production assets of 8.8 years is the average useful life of capital assets used in Aspen Group operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ASPU is equal to 6.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $33.733591 million for Aspen Group - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 18.317 million for Aspen Group is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Aspen Group at the current share price and the inputted number of shares is $0.1 billion.

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