Aspen Group's (ASPU) excessive valuation is based on a flawed and unachievable business plan. This unprofitable company's elevated stock price is driven by a strategic plan to expand the number of pre-licensure nursing campuses and enrollments. The fatal flaw with this strategy is that despite high demand for the program, the ability of ASPU to expand capacity/enrollments to meet demand is restricted by the various state nursing boards.
ASPU's plan to open two new nursing campuses a year, grow each campus to 1,500 students with $14 million in revenue and a 30% operating