Wah Fu Education Group (WAFU) AI Stock Analysis

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Wah Fu Education Group

(NASDAQ:WAFU)

Rating:43Neutral

Price Target:―

The overall stock score for Wah Fu Education Group is low due to significant financial performance challenges, including declining revenues and profitability, alongside negative cash flow trends. Technical analysis further supports a bearish outlook with all major indicators signaling weakness. Valuation concerns persist with a negative P/E ratio and no dividend yield, offering limited appeal to potential investors.

Wah Fu Education Group (WAFU) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$6.26M

Dividend YieldN/A

Average Volume (3M)146.22K

Price to Earnings (P/E)―

Beta (1Y)0.58

Revenue Growth-28.27%

EPS Growth-409.38%

CountryUS

Employees122

SectorConsumer Defensive

Sector Strength68

IndustryEducation & Training Services

Share Statistics

EPS (TTM)-0.19

Shares Outstanding4,410,559

10 Day Avg. Volume24,076

30 Day Avg. Volume146,222

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)0.59

Price to Sales (P/S)0.00

P/FCF Ratio-3.31

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

Wah Fu Education Group Business Overview & Revenue Model

Company DescriptionWah Fu Education Group Limited, through its subsidiaries, provides online exam preparation services and related technology solutions in the People's Republic of China. The company operates through two segments, Online Education Services; and Technological Development and Operation Services. The Online Education Services segment offers online education platforms to institutions, such as universities and training institutions, and online course development service companies. This segment provides self-study examination, continuing education, and non-diploma training platforms that allow students to enroll in courses for college credit; vocational education 1+X and higher vocational enrollment expansion teaching and educational administration platform; Huafu e-school system and paperless examination platform; and online training and examination preparation services directly to students. The Technological Development and Operation Services segment develops and maintains online education platforms and online courses for its clients, including universities and government agencies, as well as private clients, such as publishers; and provides consulting, maintenance, and updating services related to online education programs. In addition, it produces online training course materials. Wah Fu Education Group Limited was founded in 1999 and is headquartered in Beijing, the People's Republic of China.

How the Company Makes MoneyWah Fu Education Group generates revenue primarily through the sale of its online education services and technology solutions. Key revenue streams include fees from educational institutions for deploying and maintaining their customized e-learning platforms and software. The company also earns income from individual learners who subscribe to their online courses and educational content. Additionally, Wah Fu capitalizes on partnerships with educational institutions to expand its service offerings and customer base, which further contributes to its earnings.

Wah Fu Education Group Financial Statement Overview

Summary

Wah Fu Education Group exhibits concerning financial performance with declining revenues and profitability, coupled with negative cash flow trends. Despite a strong equity position and low debt, the company's operational and cash flow challenges need addressing to improve financial health and sustainability.

Income Statement

Neutral

The income statement reveals significant challenges, with declining revenue and profitability. The company experienced a substantial revenue decline of 32.43% from the previous year, leading to negative EBIT and EBITDA margins in the most recent period. Gross profit margin fell to 41.40%, and net profit margin turned negative at -0.77%, indicating struggles in maintaining operational efficiency and profitability.

Balance Sheet

Positive

The balance sheet shows a relatively strong equity position, with an equity ratio of 69.00%. The debt-to-equity ratio is low at 0.03, indicating minimal leverage, which reduces financial risk. However, the return on equity has turned negative, reflecting the company's inability to generate positive returns from its equity base in the latest period.

Cash Flow

Negative

Cash flow analysis indicates negative trends, with a decline in operating cash flow and free cash flow turning negative. The operating cash flow to net income ratio is unfavorable due to negative net income, and free cash flow growth has reversed, indicating potential liquidity challenges and inefficiencies in cash generation.

TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Breakdown
Income Statement		Total Revenue
6.37M	7.22M	10.69M	11.47M	8.52M	5.64M
	Gross Profit
2.51M	2.99M	5.69M	5.46M	4.52M	2.25M
	EBIT
-1.08M	-240.52K	2.01M	1.04M	1.09M	-1.57M
	EBITDA
-952.39K	100.82K	2.42M	1.04M	1.29M	-1.41M
	Net Income Common Stockholders
-1.11M	-55.29K	905.89K	743.13K	1.02M	-1.64M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
11.05M	11.05M	12.57M	11.76M	12.05M	6.83M
	Total Assets
16.16M	16.16M	17.54M	18.00M	16.97M	12.57M
	Total Debt
333.26K	333.26K	413.44K	142.53K	362.47K	615.93K
	Net Debt
-10.71M	-10.71M	-12.15M	-11.62M	-11.69M	-6.22M
	Total Liabilities
4.00M	4.00M	4.51M	5.99M	6.16M	3.27M
	Stockholders Equity
11.15M	11.15M	11.70M	11.22M	10.20M	9.06M
Cash Flow		Free Cash Flow
-1.96M	-862.33K	1.58M	1.04M	2.25M	862.48K
	Operating Cash Flow
-1.86M	-767.31K	1.61M	1.08M	2.33M	937.52K
	Investing Cash Flow
-500.05K	-231.44K	36.88K	-1.68M	2.36M	-2.62M
	Financing Cash Flow
0.00	0.00	0.00	-17.66K	11.31K	4.85M

Wah Fu Education Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.43

Price Trends

50DMA

1.46

Negative

100DMA

1.64

Negative

200DMA

1.69

Negative

Market Momentum

MACD

-0.02

Positive

RSI

46.45

Neutral

STOCH

37.50

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WAFU, the sentiment is Negative. The current price of 1.43 is below the 20-day moving average (MA) of 1.48, below the 50-day MA of 1.46, and below the 200-day MA of 1.69, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 46.45 is Neutral, neither overbought nor oversold. The STOCH value of 37.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WAFU.

Wah Fu Education Group Risk Analysis

Wah Fu Education Group disclosed 64 risk factors in its most recent earnings report. Wah Fu 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 3 New Risks

Our ordinary shares may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors. The delisting of our ordinary shares, or the threat of their being delisted, may materially and adversely affect the value of your investment. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which, if enacted, would amend the HFCA Act and require the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. Q1, 2023

The PRC government exerts substantial influence over the manner in which we conduct our business activities. The PRC government may also intervene or influence our operations and this offering at any time, which could result in a material change in our operations and our common stock could decline in value or become worthless. Q1, 2023

Restrictions on currency exchange or outbound capital flows may limit our ability to utilize our PRC revenue effectively. Q1, 2023

Wah Fu Education Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LOPE	82 Outperform	$5.53B	23.94	29.85%	―	6.31%	11.24%
LRN	82 Outperform	$6.20B	22.43	23.76%	―	14.90%	60.56%
STRA	73 Outperform	$2.20B	19.19	6.86%	2.63%	5.72%	11.02%
APEI	66 Neutral	$499.52M	27.95	8.18%	―	4.86%	―
Sector *	65 Neutral	$8.88B	14.98	4.76%	203.76%	3.54%	-2.49%
AMBO	52 Neutral	$8.32M	―	-49.39%	―	―	―
WAFU	43 Neutral	$6.26M	―	-7.52%	―	-28.27%	-409.38%

* Consumer Defensive Sector Average

Performance Comparison

WAFU

Wah Fu Education Group

1.43

-0.49

-25.52%

APEI

American Public Education

28.25

11.58

69.47%

LOPE

Grand Canyon Education

194.20

54.53

39.04%

LRN

Stride

145.46

77.39

113.69%

STRA

Strategic Education

89.41

-18.18

-16.90%

AMBO

Ambow Education Holding

2.62

1.30

98.48%

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.