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ATA Creativity Global (AACG)
NASDAQ:AACG

ATA Creativity Global (AACG) AI Stock Analysis

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AA

ATA Creativity Global

(NASDAQ:AACG)

Rating:44Neutral
Price Target:
$1.00
▲(25.00%Upside)
ATA Creativity Global's stock score is primarily impacted by its financial performance challenges, including negative profitability and cash flow issues. Technical analysis reflects a bearish trend, further weighed down by an unattractive valuation. However, the earnings call provides some optimism with revenue growth and efficient cost management.

ATA Creativity Global (AACG) vs. SPDR S&P 500 ETF (SPY)

ATA Creativity Global Business Overview & Revenue Model

Company DescriptionATA Creativity Global, together with its subsidiaries, provides educational services to individual students through its training center network in China and internationally. Its educational services include portfolio training, research-based learning, overseas study counselling, in-school art classes through cooperation with high schools, foreign language training services, junior art education, and other related educational services to its students. The company also offers online courses for students. As of December 31, 2021, it operated through 21 training centers in 20 cities in China. The company was formerly known as ATA Inc. and changed its name to ATA Creativity Global in September 2019. ATA Creativity Global was founded in 1999 and is headquartered in Beijing, China.
How the Company Makes MoneyATA Creativity Global makes money through tuition fees and program-related charges paid by students enrolled in its educational programs. The company's revenue model is primarily based on offering specialized courses in art and design, which attracts students looking to develop their skills in these areas. AACG may also generate additional income through partnerships with educational institutions and cultural organizations that collaborate on program offerings or provide resources and expertise to enhance the curriculum. The company's focus on creativity and art education allows it to tap into a niche market of students and parents willing to invest in specialized education that prepares students for careers in creative industries.

ATA Creativity Global Earnings Call Summary

Earnings Call Date:May 16, 2025
(Q1-2025)
|
% Change Since: -14.89%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with significant growth in revenue and strategic achievements, despite challenges with student enrollment numbers and continued net loss.
Q1-2025 Updates
Positive Updates
Increase in Net Revenue and Gross Profit
Q1 2025 saw a 16% increase in both net revenue and gross profit, driven by portfolio training and research-based learning services.
Growth in Portfolio Training Programs
Portfolio training program credit hours delivery increased by 5.8% and generated an 11.5% growth in revenue.
Recognition as a Leading Brand
ACG was awarded the 2025 Forbes China Studying Abroad leading brand, highlighting its positive industry reputation.
Positive Student Feedback and Admissions
Students received admissions from prestigious institutions, including Ivy League schools and top art schools.
Efficient Cost Management
Operating expenses slightly decreased, and loss from operations reduced from RMB21.7 million in Q1 2024 to RMB16.8 million in Q1 2025.
Negative Updates
Decrease in Student Enrollment
Total student enrollment decreased by 19.4% in Q1 2025 compared to the previous year.
Net Loss
Net loss attributable to ACG during Q1 2025 was RMB13.3 million, though this was an improvement from the previous year's net loss of RMB17.9 million.
Company Guidance
During the first quarter of 2025, ATA Creativity Global (ACG) reported a 15.9% increase in total net revenues, reaching RMB55.8 million, driven primarily by their portfolio training and research-based learning services. The company saw an 11.5% growth in revenue from portfolio training programs, which accounted for approximately 74% of total credit hours delivered. Despite a 19.4% decrease in total student enrollment, the delivery of credit hours increased by 5.8%, with project-based programs experiencing a 15.5% rise. ACG's gross profit also rose by 15.9% to RMB25.4 million, maintaining a gross margin of 45.5%. Operating expenses slightly decreased to RMB42.2 million, contributing to a reduced net loss of RMB13.3 million compared to the prior year. For the full year 2025, ACG expects total net revenues to range between RMB276 million and RMB281 million, representing a year-over-year increase of 3% to 5%.

ATA Creativity Global Financial Statement Overview

Summary
ATA Creativity Global shows positive revenue growth but is hindered by ongoing profitability and cash flow challenges. The company's leverage is manageable, yet declining equity and cash flow trends raise financial stability concerns. Continued focus on improving operational efficiency and profitability is crucial to enhance the overall financial health.
Income Statement
35
Negative
The income statement highlights consistent revenue growth over the years, with a significant increase from 2023 to 2024. However, the company is experiencing ongoing losses, as evidenced by negative net income and EBIT margins. The gross profit margin is relatively healthy, but the high operating expenses and negative EBIT and EBITDA margins indicate profitability challenges.
Balance Sheet
40
Negative
The balance sheet shows a moderate debt-to-equity ratio, suggesting manageable leverage. However, the declining stockholders' equity and total assets raise concerns. The equity ratio has been decreasing, indicating a weakening capital structure, although the company's cash position provides some stability.
Cash Flow
30
Negative
Cash flow analysis reveals a declining trend in operating cash flow, turning negative in 2024. Free cash flow has also deteriorated, indicating challenges in generating cash from operations. The negative free cash flow to net income ratio suggests cash flow issues amidst ongoing losses, posing potential liquidity risks.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue275.73M268.06M221.62M206.82M202.21M162.17M
Gross Profit144.74M141.26M114.66M102.51M104.80M63.65M
EBITDA-38.16M-18.82M-19.51M-34.00M-43.36M-74.44M
Net Income-31.49M-36.10M-33.66M-48.59M-36.41M-100.58M
Balance Sheet
Total Assets457.34M456.93M448.94M474.46M507.18M575.62M
Cash, Cash Equivalents and Short-Term Investments39.41M36.52M60.17M54.98M71.34M112.72M
Total Debt46.91M35.21M22.61M36.45M40.72M47.78M
Total Liabilities390.95M377.28M335.97M330.95M316.28M327.87M
Stockholders Equity66.46M79.71M113.04M143.10M187.77M198.40M
Cash Flow
Free Cash Flow0.00-23.37M6.51M-16.23M-36.29M-32.78M
Operating Cash Flow0.00-3.35M8.75M-14.61M-31.83M-27.87M
Investing Cash Flow0.00-20.26M-3.97M-2.49M-10.03M-19.09M
Financing Cash Flow0.00-93.70K403.44K188.21K827.52K6.30M

ATA Creativity Global Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.80
Price Trends
50DMA
0.89
Negative
100DMA
0.90
Negative
200DMA
0.89
Negative
Market Momentum
MACD
-0.03
Negative
RSI
44.23
Neutral
STOCH
32.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AACG, the sentiment is Negative. The current price of 0.8 is below the 20-day moving average (MA) of 0.82, below the 50-day MA of 0.89, and below the 200-day MA of 0.89, indicating a bearish trend. The MACD of -0.03 indicates Negative momentum. The RSI at 44.23 is Neutral, neither overbought nor oversold. The STOCH value of 32.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AACG.

ATA Creativity Global Risk Analysis

ATA Creativity Global disclosed 64 risk factors in its most recent earnings report. ATA Creativity Global reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

ATA Creativity Global Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
$16.65B11.16-7.38%3.11%1.59%-23.30%
52
Neutral
$21.74M191.250.17%23.70%135.33%
44
Neutral
$25.25M-38.69%20.89%10.87%
$13.62M-32.55%
$1.41M-16.22%
$69.95M1.62%
JZJZ
37
Underperform
$4.54M-168.81%-44.85%92.11%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AACG
ATA Creativity Global
0.80
-0.02
-2.44%
FEDU
Four Seasons Education (Cayman)
11.13
0.72
6.92%
EDTK
Skillful Craftsman Education Technology
0.82
-0.19
-18.81%
LXEH
Lixiang Education Holding Co
1.21
-2.63
-68.49%
KIDZ
Classover Holdings
2.78
-8.28
-74.86%
JZ
Jianzhi Education Technology Group Company Limited ADR
1.65
-7.94
-82.79%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 06, 2025