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China Online Education Group (COE)
:COE
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China Online Education Group
(COE)
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Rating:48Neutral
Price Target:―
China Online Education Group's strong revenue growth and improved cash flow are offset by persistent profitability and solvency issues. The technical analysis suggests some upward momentum, though caution is advised due to potential overbought conditions. The negative P/E ratio and lack of dividend yield weigh on valuation. Overall, while there are positive developments, significant financial risks remain.
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 (COE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$195.82M
Dividend YieldN/A
Average Volume (3M)11.33K
Price to Earnings (P/E)―
Beta (1Y)-0.09
Revenue Growth92.26%
EPS Growth-1.18%
CountryUS
Employees360
SectorConsumer Defensive
Sector Strength42
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.01
Shares Outstanding4,132,692
10 Day Avg. Volume7,904
30 Day Avg. Volume11,327
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)-7.91
Price to Sales (P/S)0.32
P/FCF Ratio21.47
Enterprise Value/Market Cap-0.13
Enterprise Value/Revenue-0.09
Enterprise Value/Gross Profit-0.11
Enterprise Value/Ebitda3.49
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
China Online Education Group Business Overview & Revenue Model
Company Description51Talk 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 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
(Q1-2025)
| % Change Since: |
Next Earnings Date:Mar 20, 2026
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook with significant increases in gross billings and net revenues, and a reduction in net loss. However, these are tempered by increased operating expenses and a reported operating loss.Q1-2025 Updates
Positive Updates
Significant Increase in Gross Billings
Gross billings increased by 74.6% compared to the same period last year, reaching USD 21.9 million.
Substantial Growth in Net Revenues
Net revenues for the first quarter were USD 18.2 million, representing a 93.1% increase from the same quarter last year.
High Gross Margin
The gross margin for the first quarter was 77%, indicating strong profitability.
Reduction in Net Loss
Net loss attributable to ordinary shareholders decreased by 53.2% from the same quarter last year.
Negative Updates
Increased Operating Expenses
Operating expenses for Q1 were USD 15.3 million, a 35.6% increase compared to the same quarter last year.
Higher Sales and Marketing Costs
Sales and marketing expenses increased by 42.7% due to higher personnel costs and marketing activities.
Operating Loss
The company reported an operating loss of USD 1.3 million for the first quarter.
Company Guidance
During the first quarter of 2025, 51Talk Online Education Group reported a significant 74.6% increase in gross billings compared to the same period last year, reaching USD 21.9 million. Net revenues rose by 93.1% to USD 18.2 million, driven by a rise in active students and lesson consumption. The gross margin was 77%, while operating expenses increased by 35.6% to USD 15.3 million, largely due to a 42.7% increase in sales and marketing expenses, which amounted to USD 11.1 million. Despite an operating loss of USD 1.3 million, the net loss attributable to ordinary shareholders decreased by 53.2% to USD 1.5 million. Looking ahead, the company anticipates second-quarter gross billings to be between USD 24.5 million and USD 25.5 million, reflecting positive momentum and strategic investments.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 | 298.12M | 369.99M | 192.06M | 103.11M | 788.00K | 297.60M |
| Gross Profit | 228.63M | 288.51M | 147.27M | 81.22M | 658.00K | 225.56M |
| EBITDA | -7.41M | -57.73M | -96.09M | -83.97M | -4.50M | 23.45M |
| Net Income | -30.41M | -52.81M | -106.49M | -42.56M | 18.74M | 21.24M |
Balance Sheet | ||||||
| Total Assets | 64.87M | 43.94M | 31.16M | 27.63M | 187.26M | 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 | -112.19M | 105.63M |
| Operating Cash Flow | 0.00 | 5.83M | 559.00K | -45.70M | -106.06M | 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
Negative
33.42
Price Trends
42.76
Negative
41.40
Negative
32.39
Positive
Market Momentum
-2.59
Positive
35.04
Neutral
31.98
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 33.42 is below the 20-day moving average (MA) of 37.08, below the 50-day MA of 42.76, and above the 200-day MA of 32.39, indicating a neutral trend. The MACD of -2.59 indicates Positive momentum. The RSI at 35.04 is Neutral, neither overbought nor oversold. The STOCH value of 31.98 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 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 0 New Risks
China Online Education Group Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $85.12M | 1.60 | 51.70% | ― | -0.84% | -11.01% | |
68 Neutral | $117.58M | 8.08 | 11.71% | 3.93% | -8.09% | -15.28% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $1.26B | -26.29 | -7.43% | ― | 8.10% | 43.35% | |
49 Neutral | $572.40M | -11.04 | -21.21% | ― | 48.81% | 61.64% | |
48 Neutral | $195.82M | -18.50 | ― | ― | 92.26% | -1.18% | |
46 Neutral | $1.10B | 55.76 | ― | ― | -1.51% | 155.73% |
* Consumer Defensive Sector Average
COE
China Online Education Group
33.42
15.44
85.87%
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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.