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Sunlands Online Education Group (STG)
:STG
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Sunlands Online Education Group
(NYSE:STG)
Rating:76Outperform
Price Target:
$11.50
▲(8.80%Upside)
Sunlands Online Education Group (STG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$146.65M
Dividend YieldN/A
Average Volume (3M)42.68K
Price to Earnings (P/E)3.5
Beta (1Y)0.47
Revenue Growth-8.25%
EPS Growth-46.70%
CountryUS
Employees2,071
SectorTechnology
Sector Strength92
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.76
Shares Outstanding5,199,346
10 Day Avg. Volume92,235
30 Day Avg. Volume42,682
Financial Highlights & Ratios
PEG Ratio-0.35
Price to Book (P/B)1.70
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 Target
$6.00Price Target Upside-43.24% Downside
Rating ConsensusHold
Number of Analyst Covering0
Sunlands Online Education Group Business Overview & Revenue Model
Company DescriptionSunlands Online Education Group (STG) is a leading provider of online education services in China. The company specializes in offering professional certification and postgraduate education services through its proprietary online learning platforms. Sunlands focuses on equipping students with the skills needed to succeed in a rapidly changing job market, leveraging advanced technologies to deliver a personalized learning experience.
How the Company Makes MoneySunlands Online Education Group generates revenue primarily through tuition fees paid by students enrolled in its online courses. The company offers various programs, including preparation courses for professional certification exams and postgraduate degree courses, each with different pricing models based on the duration and content of the course. Additionally, Sunlands may engage in partnerships with educational institutions and businesses to expand its course offerings and reach a broader audience. The company's focus on technology-driven education allows it to scale operations efficiently, contributing to its revenue growth.
Sunlands Online Education Group Earnings Call Summary
Earnings Call Date:May 22, 2025
(Q1-2025)
| % Change Since: 102.10%|
Next Earnings Date:Aug 14, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed view with strong financial management and strategic growth initiatives, especially in interest-based programs, contrasting with a decline in net revenue and income compared to the previous year. Despite the revenue decline, the company shows resilience through consistent profitability and positive cash flow, projecting a positive outlook for the next quarter.Q1-2025 Updates
Positive Updates
Continuous Profitability
Reported net income of RMB 75.2 million, marking the sixteenth consecutive profitable quarter.
Strong Financial Management
Achieved a net income margin of 15.4% supported by effective cost optimization and operational efficiency improvements.
Positive Cash Flow
Maintained positive operating cash flow for the seventh consecutive quarter.
Growth in Interest-Based Programs
Interest-based programs, professional skills development, and certification preparation accounted for 78.2% of total revenue.
Strategic Partnerships
Established partnerships with Hunan TV's Happy Shopping platform, leveraging broad consumer reach.
Curriculum Innovation
Implemented a dual teacher model achieving a 98% course completion rate and a 14% increase in knowledge retention.
Healthy Financial Position
Cash, cash equivalents, and short-term investments totaled RMB 796.9 million.
Positive Revenue Outlook
Projected Q2 2025 net revenues to increase by 1.6% to 5.6% year-over-year.
Negative Updates
Revenue Decline
Net revenues decreased by 6.8% to RMB 487.6 million, driven by decline in gross billings from post-secondary courses.
Decrease in Product Development Expenses
Product development expenses decreased by 11% due to headcount reduction.
Decline in Net Income
Net income decreased to RMB 75.2 million from RMB 112.7 million in the first quarter of 2024.
Company Guidance
During Sunlands' First Quarter 2025 Earnings Conference Call, the company provided guidance indicating net revenues for the second quarter of 2025 are expected to range between RMB 500 million to RMB 520 million, representing a year-over-year increase of 1.6% to 5.6%. This projection is based on current market conditions and reflects management's preliminary estimate of market operating conditions and customer demand. In the first quarter of 2025, Sunlands reported net revenue of RMB 487.6 million and net income of RMB 75.2 million, achieving a net income margin of 15.4%. The company maintained a gross profit margin of 85.2% and achieved a seventh consecutive quarter of positive operating cash flow, with cash, cash equivalents, and short-term investments totaling RMB 796.9 million. Despite a 6.8% year-over-year decrease in net revenues, Sunlands remains confident in its strategic direction, focusing on high-margin areas and leveraging partnerships to drive growth amid China's aging-driven education market.Sunlands Online Education Group Financial Statement Overview
Summary
Sunlands Online Education Group demonstrates solid financial recovery with strong profitability and cash flow metrics. However, the decline in revenue growth remains a concern.Income Statement
Sunlands Online Education Group has shown improvement in its profitability metrics. The gross profit margin and net profit margin have remained strong, indicating efficient cost management. However, the revenue growth rate has been negative, reflecting a decline in total revenue over the past periods, which is a concern for future growth prospects.70
Positive
Balance Sheet
The company's balance sheet shows a positive shift with an increase in stockholders' equity from negative to positive over recent periods, indicating improved financial health. The debt-to-equity ratio is favorable, suggesting low financial leverage. However, historical negative equity remains a concern, though it is progressively improving.65
Positive
Cash Flow
The cash flow statement shows positive free cash flow, and the operating cash flow has improved significantly. The company has effectively managed its cash resources, with a high free cash flow to net income ratio, reflecting strong cash generation relative to reported earnings.75
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.99B | 2.16B | 2.32B | 2.51B | 2.20B |
| Gross Profit | 1.67B | 1.89B | 1.97B | 2.13B | 1.82B |
| EBITDA | 391.65M | 714.39M | 657.72M | 246.48M | -649.02M |
| Net Income | 342.08M | 640.83M | 643.96M | 219.06M | -432.34M |
Balance Sheet | |||||
| Total Assets | 2.12B | 2.12B | 2.28B | 2.59B | 3.26B |
| Cash, Cash Equivalents and Short-Term Investments | 783.26M | 905.88M | 824.18M | 810.87M | 1.28B |
| Total Debt | 186.90M | 308.61M | 515.88M | 639.07M | 756.37M |
| Total Liabilities | 1.52B | 1.84B | 2.66B | 3.61B | 4.47B |
| Stockholders Equity | 601.35M | 277.04M | -374.49M | -1.01B | -1.21B |
Cash Flow | |||||
| Free Cash Flow | 195.11M | 134.44M | 40.43M | -389.79M | -215.60M |
| Operating Cash Flow | 195.52M | 140.80M | 62.65M | -373.25M | -188.64M |
| Investing Cash Flow | -358.86M | -71.82M | 659.04M | 342.68M | -349.31M |
| Financing Cash Flow | -112.73M | -74.66M | -465.33M | -38.90M | -59.08M |
Sunlands Online Education Group Technical Analysis
Positive
10.57
Price Trends
7.05
Positive
6.20
Positive
6.39
Positive
Market Momentum
1.32
Positive
61.20
Neutral
29.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STG, the sentiment is Positive. The current price of 10.57 is above the 20-day moving average (MA) of 9.22, above the 50-day MA of 7.05, and above the 200-day MA of 6.39, indicating a bullish trend. The MACD of 1.32 indicates Positive momentum. The RSI at 61.20 is Neutral, neither overbought nor oversold. The STOCH value of 29.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STG.
Sunlands Online Education Group Risk Analysis
Sunlands Online Education Group disclosed 87 risk factors in its most recent earnings report. Sunlands Online Education Group 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 3 New Risks
1.
The Group is subject to the uncertainty to continue to achieve profitability in the future. Q4, 2023
2.
If the Group fails to manage its business growth effectively, the success of the Group's business model will be compromised. Q4, 2023
3.
Failure to adequately and promptly respond to changes in the exams students must take to pursue their desired degrees, diplomas or certifications could cause the Group's education services to be less attractive to students. Q4, 2023
Sunlands Online Education Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $146.65M | 3.50 | 57.64% | ― | -8.25% | -46.70% | |
75 Outperform | $150.44M | 11.08 | 11.29% | 1.49% | -9.70% | -30.98% | |
63 Neutral | $34.94B | 5.14 | -11.21% | 1.86% | 5.61% | -19.33% | |
48 Neutral | $169.92M | ― | 180.24% | ― | 85.68% | 50.06% | |
43 Neutral | $53.36M | ― | -97.59% | ― | -23.75% | -201.80% |
* Technology Sector Average
Performance Comparison
STG
Sunlands Online Education Group
10.85
2.68
32.80%
COE
China Online Education Group
29.00
13.90
92.05%
BEDU
Bright Scholar Education Holdings
1.73
-0.22
-11.28%
IH
iHuman
2.87
1.31
83.97%
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.