Chegg (NYSE: CHGG) and Aspen Group (NASDAQ:ASPU) are both small-cap industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Profitability

This table compares Chegg and Aspen Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Chegg -10.40% -5.06% -4.06%
Aspen Group -8.69% -29.44% -14.10%

Risk and Volatility

Chegg has a beta of 1.83, meaning that its stock price is 83% more volatile than the S&P 500. Comparatively, Aspen Group has a beta of 0.74, meaning that its stock price is 26% less volatile than the S&P 500.

Valuation and Earnings

This table compares Chegg and Aspen Group’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Chegg $254.09 million 6.12 -$42.24 million ($0.26) -55.12
Aspen Group $14.25 million 8.43 -$1.10 million ($0.13) -68.00

Aspen Group has higher revenue, but lower earnings than Chegg. Aspen Group is trading at a lower price-to-earnings ratio than Chegg, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

91.4% of Chegg shares are owned by institutional investors. Comparatively, 2.5% of Aspen Group shares are owned by institutional investors. 20.4% of Chegg shares are owned by company insiders. Comparatively, 15.3% of Aspen Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and target prices for Chegg and Aspen Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Chegg 0 2 8 0 2.80
Aspen Group 0 0 2 0 3.00

Chegg currently has a consensus target price of $16.10, suggesting a potential upside of 12.35%. Aspen Group has a consensus target price of $10.00, suggesting a potential upside of 13.12%. Given Aspen Group’s stronger consensus rating and higher probable upside, analysts plainly believe Aspen Group is more favorable than Chegg.

Summary

Chegg beats Aspen Group on 7 of the 13 factors compared between the two stocks.

Chegg Company Profile

Chegg, Inc. is a student-first connected learning platform. The Company helps students study for college admission exams, find the colleges, get grades and test scores while in school, and find internships that allow them to gain skills to help them enter the workforce after college. The Company matches domestic and international students with colleges, universities and other academic institutions (collectively referred to as colleges) in the United States. It also offers eTextbooks library for rent and sale. The Company also has live tutors on its connected learning platform available to students online, anytime, anywhere through its Chegg Tutors service. It provides access to internships to help students gain skills that are critical to securing their first job. It offers two product lines: Required Materials and Chegg Services. The Required Materials product line includes the rental and sale of print textbooks and eTextbooks, as well as the commission it receives from Ingram.

Aspen Group Company Profile

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.

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