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China Online Education Group (COE)
:COE
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China Online Education Group
(NYSE MKT:COE)
Rating:48Neutral
Price Target:―
China Online Education Group (COE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$143.59M
Dividend YieldN/A
Average Volume (3M)8.71K
Price to Earnings (P/E)―
Beta (1Y)>-0.01
Revenue Growth85.68%
EPS Growth50.06%
CountryUS
Employees360
SectorTechnology
Sector Strength83
IndustryEducation & Training Services
Share Statistics
EPS (TTM)-0.20
Shares Outstanding4,132,692
10 Day Avg. Volume13,818
30 Day Avg. Volume8,715
Financial Highlights & Ratios
PEG Ratio-0.01
Price to Book (P/B)-0.16
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
China Online Education Group Business Overview & Revenue Model
Company DescriptionChina Online Education Group, through its subsidiaries, provides online English language education services to students in the People's Republic of China, the Philippines, and internationally. The company operates online and mobile education platforms that enable students to take live interactive English lessons with international teachers. Its flagship courses include Classic English Junior and Classic English for the development of English communication skills. It also offers Small Class lessons and programs; 51 Talk New Concept English course; and various specialty courses, such as Business English, IELTS Speaking, Free-talk, Interview English, Travel English, and Daily English for situation-based English education. China Online Education Group was founded in 2011 and is headquartered in Shenzhen, the People's Republic of China.
How the Company Makes MoneyChina Online Education Group makes money through a subscription-based revenue model. Students pay for English language courses, which are offered as packages with varying numbers of lessons. The company generates revenue from these prepaid lesson packages, which are typically sold in bulk to encourage commitment and retention. Additionally, COE may earn from premium services or products, such as specialized curriculum offerings or advanced learning tools. Strategic partnerships with educational content providers and technology firms can also contribute to revenue, enhancing the platform's offerings and attracting more students. The company's growth and profitability are driven by student enrollment numbers, lesson package sales, and effective cost management.
China Online Education Group Earnings Call Summary
Earnings Call Date:Jun 09, 2025
(Q4-2024)
| % Change Since: 8.10%|
Next Earnings Date:Aug 22, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive trend with significant revenue and billing growth, improved cash flow, and reduced losses. However, increased operating expenses and negative earnings per ADS indicate some ongoing challenges. Overall, the positive aspects outweigh the negatives.Q4-2024 Updates
Positive Updates
Strong Revenue Growth
Net revenues increased by 87% year-over-year for the fiscal year 2024, and fourth quarter net revenues were $15.2 million, a 117.3% increase from the same quarter last year.
Significant Increase in Gross Billings
Gross billings grew by 74.4% year-over-year for the fiscal year and by 93.4% in the fourth quarter compared to the same quarter last year, reaching $21.4 million.
Improved Cash Position and Positive Cash Flow
The company delivered a full-year positive operating cash flow of US$5.8 million and ended the fourth quarter with $29.2 million in cash, cash equivalents, and time deposits.
Reduction in Operating and Net Loss
Fourth quarter operating loss was $0.9 million, and net loss attributable to ordinary shareholders was $1.4 million, representing an 80.1% and 75.7% decrease from the same quarter last year, respectively.
Advances from Students
Advances from students were $45.1 million at the end of the fourth quarter, indicating strong customer commitment.
Negative Updates
Increased Operating Expenses
Fourth quarter operating expenses increased by 35.6% compared to the same quarter last year, driven by a 40.9% increase in sales and marketing expenses and a 28% increase in general and administrative expenses.
Negative Earnings Per ADS
Q4 GAAP and non-GAAP earnings per ADS were negative $0.24 and $0.2, respectively, indicating the company is still experiencing losses.
Company Guidance
In the fourth quarter of fiscal year 2024, 51Talk Online Education Group reported impressive growth metrics, with gross billings increasing by 93.4% year-over-year to $21.4 million and net revenues rising by 117.3% to $15.2 million. The gross margin stood at 77.5%, reflecting a strong financial performance. Despite operating expenses climbing to $13.4 million, the company managed to significantly reduce its operating loss to $0.9 million, an 80.1% decrease from the previous year, and its net loss attributable to shareholders to $1.4 million, down by 75.7%. The company ended the quarter with $29.2 million in cash, cash equivalents, and time deposits, and advances from students amounted to $45.1 million. Looking ahead, 51Talk projects first-quarter 2025 gross billings between $21.5 million and $22 million, underscoring its optimistic outlook amidst evolving market conditions.China Online Education Group Financial Statement Overview
Summary
China Online Education Group shows strong revenue growth but struggles with profitability and solvency. The negative equity and consistent operating losses pose significant risks, despite recent improvements in cash flow.Income Statement
The revenue growth from 2023 to 2024 was significant, with a 87% increase, indicating recovery. However, the company has persistent issues with profitability as evidenced by negative EBIT and net profit margins. Despite the revenue growth, the company's profitability metrics remain weak, with consistent losses impacting the overall financial health.40
Negative
Balance Sheet
The balance sheet shows a concerning negative stockholders' equity, indicating that liabilities exceed assets by a significant margin. The debt-to-equity ratio cannot be calculated due to negative equity, and the equity ratio is negative, reflecting high financial risk. These factors highlight potential solvency issues.15
Very Negative
Cash Flow
The cash flow statement shows improvement in operating cash flow and free cash flow from 2023 to 2024, indicating better cash management. The free cash flow to net income ratio is positive, but the overall cash flow situation is constrained by the company's negative net income and past cash flow deficits.50
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 24.69M | 50.69M | 27.11M | 15.05M | 339.90M | 314.40M | Gross Profit |
| 19.18M | 39.53M | 20.79M | 11.85M | 252.36M | 225.56M | EBIT |
| -11.33M | -8.05M | -13.66M | -12.36M | 11.19M | 15.98M | EBITDA |
| -11.53M | -7.91M | -13.56M | -12.26M | -4.50M | 21.88M | Net Income Common Stockholders |
| -11.00M | -7.24M | -15.03M | -12.84M | 18.74M | 21.24M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 103.84M | 29.19M | 23.39M | 23.06M | 131.96M | 201.08M | Total Assets |
| 157.03M | 43.94M | 31.16M | 27.63M | 187.26M | 338.20M | Total Debt |
| 14.87M | 2.68M | 631.00K | 734.00K | 6.08M | 14.78M | Net Debt |
| -21.93M | -25.07M | -20.67M | -17.45M | -27.61M | -35.22M | Total Liabilities |
| 310.11M | 58.65M | 39.35M | 21.06M | 303.05M | 470.89M | Stockholders Equity |
| ― | -15.00M | -8.34M | 6.58M | ― | ― |
| Cash Flow | Free Cash Flow | ||||
| -167.41M | 5.52M | 272.00K | -45.71M | ― | 105.63M | Operating Cash Flow |
| -170.73M | 5.83M | 559.00K | -45.70M | ― | 110.09M | Investing Cash Flow |
| 166.64M | 468.00K | 2.45M | 2.51M | 99.45M | ― | Financing Cash Flow |
| 32.03M | 240.00K | 0.00 | 20.48M | ― | 1.65M |
China Online Education Group Technical Analysis
Positive
24.56
Price Trends
18.85
Positive
19.59
Positive
17.59
Positive
Market Momentum
1.08
Negative
81.94
Negative
83.14
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COE, the sentiment is Positive. The current price of 24.56 is above the 20-day moving average (MA) of 20.15, above the 50-day MA of 18.85, and above the 200-day MA of 17.59, indicating a bullish trend. The MACD of 1.08 indicates Negative momentum. The RSI at 81.94 is Negative, neither overbought nor oversold. The STOCH value of 83.14 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for COE.
China Online Education Group Risk Analysis
China Online Education Group disclosed 68 risk factors in its most recent earnings report. China Online Education Group reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
The M&A Rules and certain other regulations of mainland China establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in mainland China. Q4, 2023
2.
Governmental regulation of currency conversion in mainland China may affect the value of your investment. Q4, 2023
3.
Our mainland China subsidiaries are subject to restrictions on paying dividends or making other payments to us, which may restrict our ability to satisfy our liquidity requirements. Q4, 2023
China Online Education Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Performance Comparison
COE
China Online Education Group
24.56
17.29
237.83%
BTCM
BIT Mining
1.97
-0.72
-26.77%
STG
Sunlands Online Education Group
5.94
-0.26
-4.19%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.