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Sunlands Online Education Group (STG)
:STG
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Sunlands Online Education Group
(NYSE:STG)
Rating:70Outperform
Price Target:
$7.50
▲(22.15%Upside)
Sunlands Online Education Group (STG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$83.80M
Dividend YieldN/A
Average Volume (3M)3.50K
Price to Earnings (P/E)2.0
Beta (1Y)0.60
Revenue Growth-8.25%
EPS Growth-46.70%
CountryUS
Employees2,071
SectorTechnology
Sector Strength82
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.76
Shares Outstanding5,199,346
10 Day Avg. Volume4,185
30 Day Avg. Volume3,498
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)-0.92
Price to Sales (P/S)0.00
P/FCF Ratio8.51
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
Sunlands Online Education Group Business Overview & Revenue Model
Company DescriptionSunlands Technology Group, through its subsidiaries, provides online education services in the People's Republic of China. It offers various degree- and diploma-oriented post-secondary courses, including preparation courses for the self-taught higher education examination (STE) for learners pursuing associate diplomas or bachelor's degrees, as well as for the entrance examinations of Master of Business Administration programs. The company's STE courses include Chinese language and literature, law, pre-school education, marketing, English, human resource management, business administration, business management, modern corporate governance, financial management, advertising, accounting, administrative management, computer information management, finance, convention management, chain operation management, and visual communication and design. It also provides professional certification preparation courses in various industries and professions, such as accounting, human resources, teaching, and finance. The company was formerly known as Sunlands Online Education Group and changed its name to Sunlands Technology Group in August 2018. Sunlands Technology Group was founded in 2003 and is headquartered in Beijing, the People's Republic of China.
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: 17.40%|
Next Earnings Date:Aug 15, 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 a solid recovery in financial performance with improved profitability and cash flow metrics. Despite challenges with revenue growth, the company's ability to generate cash flow and improve equity position is promising.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 | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.05B | 1.99B | 2.16B | 2.32B | 2.51B | 2.20B | Gross Profit |
| 1.74B | 1.67B | 1.89B | 1.97B | 2.13B | 1.82B | EBIT |
| 366.48M | 297.90M | 574.89M | 616.94M | 114.27M | -649.02M | EBITDA |
| 430.43M | 391.65M | 714.39M | 657.72M | 246.48M | -649.02M | Net Income Common Stockholders |
| 439.48M | 342.08M | 640.83M | 643.96M | 219.06M | -432.34M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 793.83M | 783.26M | 905.88M | 824.18M | 810.87M | 1.28B | Total Assets |
| 2.15B | 2.12B | 2.12B | 2.28B | 2.59B | 3.26B | Total Debt |
| 257.49M | 186.90M | 308.61M | 515.88M | 639.07M | 756.37M | Net Debt |
| -278.39M | -320.33M | -455.19M | -237.76M | 12.36M | -4.34M | Total Liabilities |
| 1.61B | 1.52B | 1.84B | 2.66B | 3.61B | 4.47B | Stockholders Equity |
| 546.00M | 601.35M | 277.04M | -374.49M | -1.01B | -1.21B |
| Cash Flow | Free Cash Flow | ||||
| 0.00 | 195.11M | 134.44M | 40.43M | -389.79M | -215.60M | Operating Cash Flow |
| 0.00 | 195.52M | 140.80M | 62.65M | -373.25M | -188.64M | Investing Cash Flow |
| 0.00 | -358.86M | -71.82M | 659.04M | 342.68M | -349.31M | Financing Cash Flow |
| 0.00 | -112.73M | -74.66M | -465.33M | -38.90M | -59.08M |
Sunlands Online Education Group Technical Analysis
Positive
6.14
Price Trends
5.31
Positive
5.77
Positive
6.20
Positive
Market Momentum
0.28
Negative
58.59
Neutral
53.86
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 6.14 is above the 20-day moving average (MA) of 5.57, above the 50-day MA of 5.31, and below the 200-day MA of 6.20, indicating a bullish trend. The MACD of 0.28 indicates Negative momentum. The RSI at 58.59 is Neutral, neither overbought nor oversold. The STOCH value of 53.86 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $124.06M | 9.50 | 10.27% | 3.56% | -10.89% | -45.97% | |
70 Outperform | $83.80M | 1.98 | 57.64% | ― | -8.25% | -46.70% | |
62 Neutral | $11.92B | 10.48 | -7.50% | 2.95% | 7.40% | -8.18% | |
49 Neutral | $52.62M | ― | -97.59% | ― | -23.75% | -201.80% | |
48 Neutral | $180.47M | ― | 180.24% | ― | 85.68% | 50.06% | |
| $15.61M | ― | -32.55% | ― | ― | ― |
* Technology Sector Average
Performance Comparison
STG
Sunlands Online Education Group
6.14
-0.51
-7.67%
COE
China Online Education Group
27.40
19.70
255.84%
BEDU
Bright Scholar Education Holdings
1.81
-0.19
-9.50%
EDTK
Skillful Craftsman Education Technology
0.98
-0.04
-3.92%
IH
iHuman
2.40
0.69
40.35%
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.