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China Online Education Group (COE)
:COE
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China Online Education Group
(NYSE MKT:COE)
55Neutral
China Online Education Group (COE) vs. S&P 500 (SPY)
Market Cap
$114.43M
Dividend YieldN/A
Average Volume (3M)15.97K
Price to Earnings (P/E)―
Beta (1Y)0.37
Revenue Growth70.56%
EPS Growth9.71%
CountryUS
Employees310
SectorTechnology
Sector Strength45
IndustryEducation
Share Statistics
EPS (TTM)-1.78
Shares Outstanding4,027,222
10 Day Avg. Volume10,034
30 Day Avg. Volume15,973
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)4.22
Price to Cash Flow (P/CF)N/A
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 TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
China Online Education Group Business Overview & Revenue Model
Company DescriptionChina Online Education Group (COE) is a leading online education platform in China, dedicated to providing high-quality English language education to students. The company operates through its flagship brand 51Talk, which offers one-on-one English lessons with experienced teachers. COE leverages technology to deliver personalized learning experiences, aiming to make English learning more accessible and effective for Chinese students.
How the Company Makes MoneyChina Online Education Group primarily generates revenue through the sale of online English language courses to students. The company offers a variety of packages and subscription plans that allow students to engage in one-on-one English lessons with teachers. Revenue is primarily driven by the number of active students and the frequency of their lessons. Additionally, COE may engage in strategic partnerships with educational institutions and other businesses to expand its reach and enhance its service offerings. By focusing on personalized education and leveraging technology, the company aims to maintain a steady stream of income through its educational services.
China Online Education Group Financial Statement Overview
Summary
China Online Education Group exhibits strong revenue growth but faces challenges with profitability due to negative profit margins and net income. The balance sheet shows financial stress with negative equity, posing a risk. Despite improved cash flow, historical volatility suggests caution.Income Statement
The company experienced a robust revenue growth rate of approximately 80.2% from 2022 to 2023. However, the financials are challenged by negative profit margins: a gross profit margin of 76.7%, an EBIT margin of -50.4%, and a net profit margin of -55.4% in 2023. The persistent negative net income indicates a struggle to achieve profitability.45
Neutral
Balance Sheet
The balance sheet is concerning with a negative stockholders' equity of $-8.34M in 2023, indicating liabilities exceed assets. The debt-to-equity ratio is not meaningful due to negative equity, and the equity ratio is also negative, highlighting financial instability and risk.30
Negative
Cash Flow
Cash flow improved with a swing to positive free cash flow of $272K in 2023 from a significant negative in 2022. The operating cash flow to net income ratio suggests some ability to cover expenses, but the past volatility in cash flows remains a risk factor.50
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 24.69M | 27.11M | 15.05M | 339.90M | 314.40M | 212.01M | Gross Profit |
| 19.18M | 20.79M | 11.85M | 252.36M | 225.56M | 149.14M | EBIT |
| -11.33M | -13.66M | -12.36M | 11.19M | 15.98M | ― | EBITDA |
| -11.53M | -13.56M | -12.26M | -4.50M | 21.88M | ― | Net Income Common Stockholders |
| -11.00M | -15.03M | -12.84M | 18.74M | 21.24M | ― |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 103.84M | 23.39M | 23.06M | 131.96M | 201.08M | 134.34M | Total Assets |
| 157.03M | 31.16M | 27.63M | 187.26M | 338.20M | 200.31M | Total Debt |
| 14.87M | 631.00K | 734.00K | 6.08M | 14.78M | 10.24M | Net Debt |
| -21.93M | -20.67M | -17.45M | -27.61M | -35.22M | -38.77M | Total Liabilities |
| 310.11M | 39.35M | 21.06M | 303.05M | 470.89M | 349.20M | Stockholders Equity |
| ― | -8.34M | 6.58M | ― | ― | ― |
| Cash Flow | Free Cash Flow | ||||
| -167.41M | 272.00K | -45.71M | ― | 105.63M | 55.28M | Operating Cash Flow |
| -170.73M | 559.00K | -45.70M | ― | 110.09M | 56.87M | Investing Cash Flow |
| 166.64M | 2.45M | 2.51M | 99.45M | ― | ― | Financing Cash Flow |
| 32.03M | 0.00 | 20.48M | ― | 1.65M | ― |
China Online Education Group Technical Analysis
Positive
20.00
Price Trends
19.98
Positive
17.61
Positive
15.21
Positive
Market Momentum
-0.35
Negative
53.33
Neutral
92.90
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For COE, the sentiment is Positive. The current price of 20 is above the 20-day moving average (MA) of 19.54, above the 50-day MA of 19.98, and above the 200-day MA of 15.21, indicating a bullish trend. The MACD of -0.35 indicates Negative momentum. The RSI at 53.33 is Neutral, neither overbought nor oversold. The STOCH value of 92.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $8.01B | 20.79 | 10.40% | ― | 34.42% | 28.54% | |
72 Outperform | $7.82B | 66.51 | 3.23% | ― | 55.62% | ― | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% | |
55 Neutral | $114.43M | ― | 180.24% | ― | 70.56% | 9.71% | |
53 Neutral | $994.40M | 85.60 | 25.15% | ― | 5.51% | ― | |
47 Neutral | $81.13M | ― | -147.16% | ― | -13.78% | -5297.96% |
* Technology Sector Average
Performance Comparison
COE
China Online Education Group
20.00
13.29
198.06%
EDU
New Oriental Education Tech
49.01
-39.58
-44.68%
CHGG
Chegg
0.77
-7.25
-90.40%
TAL
TAL Education Group
13.09
0.22
1.71%
DAO
Youdao
8.32
3.86
86.55%
China Online Education Group Earnings Call Summary
Earnings Call Date: Dec 13, 2024 | % Change Since: 14.29% | Next Earnings Date: Mar 12, 2025
Earnings Call Sentiment Positive
The earnings call reflected strong revenue and gross billings growth, improved cash flow, and successful AI integration, indicating positive business momentum. However, increased operating expenses and ongoing losses present challenges. The sentiment is overall positive due to significant growth achievements and future expansion plans.Highlights
Significant Revenue Growth
Third quarter revenues were USD 14 million, a 79.4% increase from the same quarter last year, driven by an increase in active students and lesson consumption.
Strong Gross Billings
Gross billings grew by 80.7% from the same quarter last year to USD 19.8 million.
Improved Cash Flow
The company achieved a positive cash flow of above $2 million last quarter and anticipates maintaining a positive cash flow throughout 2025.
AI Adoption Success
AI adoption has improved lead conversion rates, tutor management, and student classroom experiences, aligning with the goal of becoming a leading EdTech company.
Future Market Expansion
Plans to expand into new markets such as Vietnam and explore opportunities in Spanish-speaking regions, along with ongoing operations in Southeast Asia and Arabic regions.
Lowlights
Increased Operating Expenses
Q3 operating expenses were USD 11.8 million, a 20.6% increase from the same quarter last year, primarily due to higher sales and marketing personnel costs.
Operating and Net Losses
Q3 operating loss was USD 0.8 million and net loss attributable to ordinary shareholders was USD 0.6 million, despite significant decreases from the previous year.
Rising General and Administrative Expenses
Q3 general and administrative expenses increased by 38.6% from the same quarter last year to USD 2.8 million.
Company Guidance
During the Q3 2024 earnings call for 51Talk, the company provided positive guidance for future growth and financial performance. The executives highlighted that gross billings exceeded prior guidance, with a notable increase of 80.7% year-over-year, reaching USD 19.8 million. The company maintained a strong gross margin of 78.7% and achieved a positive cash flow above USD 2 million. Despite an operating loss of USD 0.8 million, this represented a significant reduction of 79.6% from the previous year. Looking ahead, the company anticipates net gross billings for Q4 2024 to range between USD 20.5 million and USD 21 million. They also discussed strategic expansion efforts, including plans to enter new markets such as Vietnam and potentially Spanish-speaking regions, which align with their goal of becoming a leading global EdTech company.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.