Sunlands Online Education Group (STG) AI Stock Analysis

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Sunlands Online Education Group

(NYSE:STG)

62Neutral

Sunlands Online Education Group's stock reflects a cautiously optimistic financial outlook, with strengths in cost management and cash flow. However, significant challenges include declining revenues and high leverage. Technical indicators show moderate momentum, and valuation metrics suggest potential undervaluation. The earnings call highlights a mixed outlook with strategic realignments but anticipates revenue declines, which tempers the overall score.

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

Market Cap

$62.19M

Dividend YieldN/A

Average Volume (3M)3.54K

Price to Earnings (P/E)1.4

Beta (1Y)0.85

Revenue Growth-8.76%

EPS Growth-35.01%

CountryUS

Employees2,113

SectorTechnology

Sector Strength40

IndustryEducation & Training Services

Share Statistics

EPS (TTM)3.48

Shares Outstanding5,201,558

10 Day Avg. Volume2,004

30 Day Avg. Volume3,538

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.08

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

Sunlands Online Education Group Business Overview & Revenue Model

Company DescriptionSunlands Online Education Group (STG) is a leading provider of online post-secondary and professional education services in China. The company specializes in delivering high-quality educational content and training programs to students and professionals through its online platform. Sunlands offers a wide range of courses, including professional certification, master's degree-oriented, and other educational programs tailored to various industries.

How the Company Makes MoneySunlands Online Education Group generates revenue primarily through the sale of tuition packages for its online courses. The company offers a subscription-based model where students pay for access to courses and learning materials over a specified period. This model allows Sunlands to maintain a steady stream of income as students enroll in long-term courses. Key revenue streams include tuition fees from professional certification courses, master's degree-oriented courses, and other educational programs. The company also engages in partnerships with educational institutions and industry professionals to enhance its course offerings and attract a broader student base, contributing to its financial performance.

Sunlands Online Education Group Financial Statement Overview

Summary

Sunlands Online Education Group exhibits a mixed financial performance. Strong gross margins and improved cash flows are positive, but declining revenue, high leverage, and low equity levels are significant concerns. The financial position is precarious, with risks in maintaining revenue levels and financial stability.

Income Statement

Positive

Sunlands Online Education Group shows a mixed performance in its income statement. The gross profit margin is strong at approximately 87.7%, reflecting effective cost management. However, the net profit margin is moderate at 29.7%, with a declining revenue growth rate of -7.04% year-over-year, indicating challenges in maintaining revenue levels. The EBIT and EBITDA margins are solid, indicating operational efficiency, but the declining revenue trend is concerning.

Balance Sheet

Neutral

The balance sheet indicates a precarious financial position with a debt-to-equity ratio of 1.11, suggesting high leverage. The return on equity (ROE) is robust at 231.3%, albeit primarily due to low equity levels. The equity ratio is low at 13.1%, pointing to financial instability and potential risks associated with high liabilities compared to equity.

Cash Flow

Neutral

Cash flow analysis reveals a positive free cash flow growth rate of 232.5%, indicating improved cash generation. The operating cash flow to net income ratio is 0.22, suggesting that operating cash flows are not fully covering net income. The free cash flow to net income ratio is 0.21, reflecting a need for careful cash management despite positive free cash flow trends.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
2.05B	2.16B	2.32B	2.51B	2.20B	2.19B
	Gross Profit
1.74B	1.89B	1.97B	2.13B	1.82B	1.80B
	EBIT
366.48M	574.89M	616.94M	114.27M	-649.02M	-459.72M
	EBITDA
430.43M	714.39M	657.72M	246.48M	-649.02M	-459.72M
	Net Income Common Stockholders
439.48M	640.83M	643.96M	219.06M	-432.34M	-395.03M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
912.53M	905.88M	824.18M	810.87M	1.28B	1.62B
	Total Assets
1.97B	2.12B	2.28B	2.59B	3.26B	3.97B
	Total Debt
0.00	308.61M	515.88M	639.07M	756.37M	882.11M
	Net Debt
-559.46M	-455.19M	-237.76M	12.36M	-4.34M	-520.12M
	Total Liabilities
2.59B	1.84B	2.66B	3.61B	4.47B	4.71B
	Stockholders Equity
-617.12M	277.04M	-374.49M	-1.01B	-1.21B	-738.15M
Cash Flow		Free Cash Flow
0.00	134.44M	40.43M	-389.79M	-215.60M	-559.08M
	Operating Cash Flow
0.00	140.80M	62.65M	-373.25M	-188.64M	-533.55M
	Investing Cash Flow
0.00	-71.82M	659.04M	342.68M	-349.31M	729.55M
	Financing Cash Flow
0.00	-74.66M	-465.33M	-38.90M	-59.08M	-64.15M

Sunlands Online Education Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price4.79

Price Trends

50DMA

6.03

Negative

100DMA

6.12

Negative

200DMA

6.85

Negative

Market Momentum

MACD

-0.21

Negative

RSI

41.18

Neutral

STOCH

25.89

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STG, the sentiment is Negative. The current price of 4.79 is below the 20-day moving average (MA) of 5.42, below the 50-day MA of 6.03, and below the 200-day MA of 6.85, indicating a bearish trend. The MACD of -0.21 indicates Negative momentum. The RSI at 41.18 is Neutral, neither overbought nor oversold. The STOCH value of 25.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 0 New Risks

Sunlands Online Education Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EDU	74 Outperform	$7.14B	18.21	10.40%	―	34.42%	28.54%
TAL	72 Outperform	$5.84B	49.72	3.23%	―	55.62%	―
STG	62 Neutral	$62.19M	1.38	78.29%	―	-8.76%	-35.01%
Sector *	57 Neutral	$20.24B	9.51	-13.28%	2.72%	5.43%	-24.54%
COE	55 Neutral	$97.67M	―	180.24%	―	70.56%	9.71%
DAO	54 Neutral	$817.51M	70.37	25.15%	―	3.01%	―

* Technology Sector Average

Performance Comparison

STG

Sunlands Online Education Group

4.79

-4.07

-45.94%

EDU

New Oriental Education Tech

42.57

-45.74

-51.79%

COE

China Online Education Group

15.88

9.37

143.93%

TAL

TAL Education Group

9.96

-2.25

-18.43%

DAO

Youdao

6.78

2.73

67.41%

Sunlands Online Education Group Earnings Call Summary

Earnings Call Date: Mar 21, 2025 | % Change Since: -14.31% | Next Earnings Date: May 22, 2025

Earnings Call Sentiment Neutral

While Sunlands has shown consistent profitability and growth in student enrollments, the company faces challenges with declining revenues and net income. The integration of advanced technology and expansion into senior education present opportunities for future growth, but the financial setbacks cannot be overlooked.

Highlights

Consistent Profitability

Sunlands reported its 15th consecutive quarter of profitability with a net income of RMB57.8 million for Q4 2024 and RMB342.1 million for the full fiscal year 2024.

Record Student Enrollments

Student enrollments reached a record high of about 675,000 in 2024, indicating a 9.5% year-over-year increase in new student enrollments.

Strong Operating Cash Flow

Maintained positive operating cash flow for the third consecutive year, reflecting disciplined financial management.

Expansion in Senior Education

The company has expanded its course offerings for senior education, tapping into the growing silver economy with strong government support.

Integration of Advanced Technology

Integration of DeepSeek in February 2025 to enhance personalized learning experiences and operational efficiency through AI.

Lowlights

Revenue Decline

Net revenues decreased by 10.8% in Q4 2024 compared to Q4 2023, with a full-year decline of 7.8% in net revenue.

Drop in Net Income

Net income for Q4 2024 was RMB57.8 million, a significant drop from RMB155.2 million in Q4 2023.

Deferred Revenue Decline

Deferred revenue balance was RMB916.5 million as of December 2024, down from RMB1,113.9 million in December 2023.

Increase in Operating Expenses

Operating expenses increased slightly by 0.7% in Q4 2024 compared to the previous year, with sales and marketing expenses rising by 3%.

Company Guidance

During the fourth quarter of 2024, Sunlands reported net revenue of RMB483.5 million and a net income of RMB57.8 million, marking its 15th consecutive profitable quarter. Over the full fiscal year, the company achieved an annual revenue of RMB1.99 billion with a net income of RMB342.1 million, despite a 7.8% decline in full-year net revenue. Student enrollments reached an all-time high of approximately 675,000 in 2024, demonstrating the company's strategic shift towards more accessible short-term programs. The gross profit margin for the year remained at 84%, while the net profit margin was 17.2%. The company also maintained positive operating cash flow for the third consecutive year. For 2025's first quarter, Sunlands anticipates net revenues between RMB470 million and RMB490 million, reflecting a year-over-year decrease of 6.4% to 10.2%. These results underscore Sunlands' ability to adapt to macroeconomic challenges and evolving market dynamics while continuing to prioritize profitable growth and operational resilience.

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.