China Online Education Group (COE) AI Stock Analysis

• Market Cap: $171.86M
• Dividend Yield: N/A
• Average Volume (3M): 11.33K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.14
• Revenue Growth: 92.26%
• EPS Growth: -1.18%
• Country: US
• Employees: 360
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Software - Application
• EPS (TTM): -0.01
• Shares Outstanding: 4,132,692
• 10 Day Avg. Volume: 7,904
• 30 Day Avg. Volume: 11,327
• PEG Ratio: <0.01
• Price to Book (P/B): -0.13
• Price to Sales (P/S): 0.00534
• P/FCF Ratio: 0.36
• Enterprise Value/Market Cap: -0.15
• Enterprise Value/Revenue: -0.32
• Enterprise Value/Gross Profit: -0.42
• Enterprise Value/Ebitda: 2.85
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 44 Neutral
• Price Target: $27.00 ▼(-7.94% Downside)

The score is held down primarily by weak technicals (price below all major moving averages and negative MACD) and below-average financial strength due to ongoing losses and negative equity, despite strong revenue rebound and improving cash flow. Valuation is also constrained by negative earnings and no dividend data.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for COE's services, enhancing its market position and potential for future profitability.

Cash Flow Improvement

Improved cash flow reflects better financial management, providing COE with more resources to invest in growth and operational efficiency.

Gross Margin Strength

High gross margins demonstrate COE's ability to maintain pricing power and cost control, supporting long-term profitability.

Negative Factors

Profitability Challenges

Ongoing profitability issues could hinder COE's ability to sustain operations and invest in growth, posing long-term financial risks.

Negative Equity

Negative equity indicates liabilities exceed assets, raising solvency concerns and limiting COE's financial flexibility.

Increased Operating Expenses

Rising operating expenses, particularly in sales and marketing, may pressure margins and delay profitability improvements.

China Online Education Group Business Overview & Revenue Model

Company Description

51Talk Online Education Group engages in the operation of an online education platform in China. It operates under the China and Philippines geographical segments. Its online and mobile education platforms enable students across China to take live interactive english lessons with overseas foreign teachers on demand. The company was founded by Jia Jia Huang, Ting Shu, and Li Ming Zhang in July 2011 and is headquartered in Singapore.

How the Company Makes Money

China 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 Financial Statement Overview

Summary

Revenue has rebounded strongly with sustained high gross margins, and operating/free cash flow turned positive in 2023–2024. However, profitability remains negative and the balance sheet is pressured by persistently negative equity, keeping overall financial strength below average.

Income Statement

Revenue rebounded sharply after the 2022 collapse (2023 up ~80% and 2024 up ~93%), and gross margins stayed strong (~72%–79%), indicating a solid underlying unit margin profile. However, profitability remains weak: EBIT and net income are still materially negative in 2023–2024 (2024 net margin about -14%), even though losses narrowed meaningfully versus 2022–2023. Overall, the trajectory is improving, but sustained profitability has not yet been re-established.

Balance Sheet

Debt is low in absolute terms (roughly $2.7M in 2024), which limits refinancing and interest-burden risk. The key concern is persistently negative stockholders’ equity in most recent years (including 2023–2024), which weakens balance-sheet flexibility and can elevate risk perception despite modest debt. Total assets are relatively small (~$44M in 2024), leaving less cushion if operating losses re-accelerate.

Cash Flow

Cash generation improved meaningfully: operating cash flow turned positive in 2023–2024 (about $0.6M and $5.8M), and free cash flow was also positive in both years (about $0.3M and $5.5M). Cash flow quality is mixed—recent cash flow is not consistently strong relative to reported losses (2024 operating cash flow is modest versus the net loss), and the business has shown high volatility historically (very large negative operating/free cash flow in 2021–2022). Still, the latest two-year direction is constructive.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	81.22M	50.69M	27.11M	15.05M	788.00K	314.40M
Gross Profit	61.14M	39.53M	20.79M	11.85M	658.00K	225.56M
EBITDA	-9.07M	-7.91M	-13.56M	-12.26M	-4.50M	21.88M
Net Income	-10.90M	-7.24M	-15.03M	-42.56M	18.74M	21.24M
Balance Sheet
Total Assets	64.87M	43.94M	31.16M	27.63M	187.07M	338.20M
Cash, Cash Equivalents and Short-Term Investments	36.63M	29.19M	23.39M	23.06M	31.11M	201.08M
Total Debt	3.31M	2.68M	631.00K	734.00K	1.63M	14.78M
Total Liabilities	88.67M	58.65M	39.35M	21.06M	300.50M	470.89M
Stockholders Equity	-23.92M	-15.00M	-8.34M	6.58M	-113.43M	-132.70M
Cash Flow
Free Cash Flow	0.00	5.52M	272.00K	-45.71M	-105.15M	105.63M
Operating Cash Flow	0.00	5.83M	559.00K	-45.70M	-105.03M	110.09M
Investing Cash Flow	0.00	468.00K	2.45M	2.51M	98.31M	-105.99M
Financing Cash Flow	0.00	240.00K	0.00	20.48M	-2.35M	1.29M

China Online Education Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 29.33
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COE, the sentiment is Negative. The current price of 29.33 is below the 20-day moving average (MA) of 31.23, below the 50-day MA of 37.49, and below the 200-day MA of 32.96, indicating a bearish trend. The MACD of -2.67 indicates Negative momentum. The RSI at 37.56 is Neutral, neither overbought nor oversold. The STOCH value of 34.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for COE.

China Online Education Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STG	68 Neutral	$75.85M	1.43	51.70%	―	-0.84%	-11.01%
IH	67 Neutral	$99.13M	7.06	11.71%	3.93%	-8.09%	-15.28%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
COUR	61 Neutral	$1.11B	-23.23	-7.43%	―	8.10%	43.35%
DAO	55 Neutral	$1.53B	77.73	―	―	-1.51%	155.73%
GOTU	49 Neutral	$599.19M	-11.56	-21.21%	―	48.81%	61.64%
COE	44 Neutral	$171.86M	-16.23	―	―	92.26%	-1.18%

China Online Education Group Corporate Events

51Talk Reports Strong Q3 2025 Growth Amid Global Expansion

51Talk Online Education Group announced its third-quarter 2025 financial results, highlighting significant growth in gross billings, net revenues, and active student numbers compared to the same period in 2024. Despite a substantial increase in operating expenses, primarily due to sales and marketing efforts, the company achieved a notable milestone by surpassing 100,000 active students, reflecting its successful global expansion strategy. The company reported an operating loss and net loss for the quarter, but maintained a positive operating cash flow, underscoring disciplined financial management. The participation of students from five geographies in COP30 in Brazil further demonstrated the company’s expanding global presence.

51Talk Announces $10 Million Share Repurchase Program

On December 8, 2025, 51Talk Online Education Group announced a new share repurchase program authorized by its board of directors, allowing the company to buy back up to $10 million worth of shares over the next 12 months. This strategic move, funded from the company’s existing cash balance, could potentially enhance shareholder value and reflects confidence in the company’s financial health, positioning it favorably within the competitive online education industry.