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Sunlands Online Education Group (STG)
NYSE:STG
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Sunlands Online Education Group (STG) AI Stock Analysis

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STG

Sunlands Online Education Group

(NYSE:STG)

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Outperform 73 (OpenAI - 4o)
Rating:73Outperform
Price Target:
$9.50
▲(17.28% Upside)
Sunlands Online Education Group's overall stock score is driven by strong financial performance and positive earnings call sentiment. The undervaluation indicated by the low P/E ratio further supports the score. Technical analysis suggests some short-term bearish trends, but the long-term outlook remains positive.

Sunlands Online Education Group (STG) vs. SPDR S&P 500 ETF (SPY)

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 generates revenue primarily through tuition fees paid by students for their online courses. The company offers a variety of pricing models, including subscription-based services and one-time course fees, catering to different learning needs and preferences. Additionally, Sunlands has established partnerships with various educational institutions and industry organizations, which can provide further avenues for revenue through collaborative programs and endorsements. The company also benefits from economies of scale as it expands its student base, thereby increasing its overall profitability.

Sunlands Online Education Group Earnings Call Summary

Earnings Call Date:Aug 14, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 19, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive sentiment with solid revenue and net income growth driven by interest-based learning and a focus on the silver demographic. Although there were some declines in deferred revenue and short-term investments, the company's profitability and cash flow resilience were emphasized.
Q2-2025 Updates
Positive Updates
Solid Revenue Growth
Net revenue reached RMB 539 million, up 9.5% year-over-year, supported by resilient learner demand and course expansion.
Significant Increase in Net Income
Net income surged to RMB 126.6 million, with a net margin expanding to 23.5%, representing a 54% increase from the same period last year and 68.5% sequential jump.
Strong Growth in Interest-Based Learning
Interest-based learning achieved over 15% year-over-year revenue growth, with a significant focus on the silver demographic.
Resilient Cash Flow
Net cash from operating activities remained positive for the eighth consecutive quarter.
High Customer Satisfaction
High satisfaction levels for certain courses generally above 95%.
Continued Profitability
Achieved 17 consecutive quarters of profitability.
Negative Updates
Decrease in Deferred Revenue
Deferred revenue balance decreased from RMB 916.5 million as of December 31, 2024, to RMB 814.3 million as of June 30, 2025.
Reduction in Short-Term Investments
Short-term investments decreased from RMB 276 million as of December 31, 2024, to RMB 166.6 million as of June 30, 2025.
Company Guidance
During Sunlands' Second Quarter 2025 Earnings Conference Call, the company provided an optimistic outlook supported by several key financial metrics. Net revenue for the quarter rose by 9.5% year-over-year to RMB 539 million, driven by strong demand in interest-based courses, which accounted for 78% of total revenue. The company achieved a net income of RMB 126.6 million, marking a 54% increase from the same period last year and a 68.5% sequential jump, with a net margin expansion to 23.5%. New student enrollments in interest-based courses exceeded 300,000 for the first half of 2025, contributing to cumulative enrollments of over 2.1 million since 2020. The company also reported a robust course completion rate of 18% and a repurchase rate of 16% among its more than 1 million paying users. Sunlands anticipates net revenues for the fourth quarter of 2025 to be between RMB 500 million and RMB 520 million, indicating a year-over-year increase of 1.8% to 5.8%.

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. While revenue growth has been a challenge, the company's ability to generate cash flow and improve equity position is promising. Continued focus on revenue growth and maintaining profitability will be crucial for sustained financial health.
Income Statement
70
Positive
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.
Balance Sheet
65
Positive
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.
Cash Flow
75
Positive
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.95B1.99B2.16B2.32B2.51B2.20B
Gross Profit1.64B1.67B1.89B1.97B2.13B1.82B
EBITDA318.34M391.65M714.39M657.72M246.48M-649.02M
Net Income304.52M342.08M640.83M643.96M219.06M-432.34M
Balance Sheet
Total Assets2.12B2.12B2.12B2.28B2.59B3.26B
Cash, Cash Equivalents and Short-Term Investments796.90M783.26M905.88M824.18M810.87M1.28B
Total Debt160.92M186.90M308.61M515.88M639.07M756.37M
Total Liabilities1.46B1.52B1.84B2.66B3.61B4.47B
Stockholders Equity661.58M601.35M277.04M-374.49M-1.01B-1.21B
Cash Flow
Free Cash Flow0.00195.11M134.44M40.43M-389.79M-215.60M
Operating Cash Flow0.00195.52M140.80M62.65M-373.25M-188.64M
Investing Cash Flow0.00-358.86M-71.82M659.04M342.68M-349.31M
Financing Cash Flow0.00-112.73M-74.66M-465.33M-38.90M-59.08M

Sunlands Online Education Group Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price8.10
Price Trends
50DMA
9.16
Negative
100DMA
7.89
Positive
200DMA
6.87
Positive
Market Momentum
MACD
-0.30
Positive
RSI
42.75
Neutral
STOCH
60.31
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STG, the sentiment is Neutral. The current price of 8.1 is below the 20-day moving average (MA) of 8.37, below the 50-day MA of 9.16, and above the 200-day MA of 6.87, indicating a neutral trend. The MACD of -0.30 indicates Positive momentum. The RSI at 42.75 is Neutral, neither overbought nor oversold. The STOCH value of 60.31 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
$151.47M10.4110.26%2.88%-8.09%-15.28%
73
Outperform
$107.97M2.2454.65%-3.74%-26.52%
48
Neutral
$247.86M-37.9591.86%52.66%
42
Neutral
$57.98M-0.42-192.77%-23.75%-201.80%
62
Neutral
$20.33B14.63-3.31%3.23%1.93%-12.26%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
STG
Sunlands Online Education Group
8.10
0.72
9.76%
COE
China Online Education Group
42.30
26.80
172.90%
BEDU
Bright Scholar Education Holdings
1.95
-0.14
-6.70%
EDTK
Skillful Craftsman Education Technology
1.11
0.03
2.78%
IH
iHuman
2.95
0.81
37.85%

Sunlands Online Education Group Corporate Events

Sunlands Technology Group Reports Strong Q2 2025 Financial Results
Aug 14, 2025

Sunlands Technology Group reported its unaudited financial results for the second quarter of 2025, showing a 9.5% increase in net revenues to RMB539.0 million compared to the same period in 2024. The company achieved a significant rise in net income to RMB126.6 million, with a net income margin of 23.5%, driven by structural cost optimization and increased operating leverage. Despite a decrease in new student enrollments, the company maintained a strong financial position with positive cash flow, enabling continued investment in AI integration and personalized learning solutions. The strategic shift towards interest-based courses, which now constitute 77.6% of total revenues, has been a key driver of growth.

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.Date of analysis: Sep 27, 2025