One-glance verdict
Undervalued
$90.80 our estimate vs market $2.55
97% below our estimate, below the bear case
Fundamentals snapshot
Sunlands Technology Group
STG · NYQ · Consumer Defensive · Education & Training Services
Current price
$2.55
52-week range
$2.44 - $7.00
Market cap
$32.57M
Balance sheet
Healthy
521.69x Strong cushion
Net cash $108.50M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Revenue grew 5.9% last year.
- Reward Free cash flow was positive in 4/10 years.
- Risk Stock trades 260.6% above its 5-year average P/E.
- Risk Operating margin compressed from 26.6% to 20.5% over 3 years.
What this company does
Sunlands Technology Group
Sunlands Technology Group offers online courses in China for adults wanting to learn new skills or get degrees. The money they make comes from students paying for these courses and related support services. This business matters because it helps people advance their careers and education in a flexible way.
How the company got here
Sunlands Technology Group, founded in 2003 and originally known as Sunlands Online Education Group, has become a significant player in China's adult online education landscape. The company made a pivotal shift from offline to online learning in 2014, building a digital infrastructure that allows it to offer education accessible anywhere, anytime. This strategic move has enabled Sunlands to reach millions of adult learners across China, supporting their continuous educational journeys. The company rebranded to Sunlands Technology Group in August 2018, reflecting its focus on technology-driven education solutions.
What it actually does
Sunlands Technology Group provides a wide range of online education services and courses for adults in China. These offerings are designed to help individuals advance their academic qualifications, improve their professional skills, and pursue personal interests. The company utilizes a one-to-many live streaming platform, complemented by virtual learning communities and a large library of educational content, to create an interactive and personalized learning environment. Sunlands also offers professional assistance and counseling to help students choose suitable learning paths and create study plans.
Degree- or diploma-oriented post-secondary courses
This part of Sunlands' business focuses on helping adults earn degrees or diplomas. It includes preparation courses for state-administered exams that lead to associate diplomas or bachelor's degrees. The subjects covered are diverse, ranging from administrative management and business management to law, computer information management, and pre-school education. These courses are crucial for individuals looking to further their formal education or gain qualifications for career advancement.
Professional certification preparation courses
Sunlands offers courses designed to help professionals prepare for certification exams in various industries. This includes fields like accounting, human resources, and teaching. By providing specialized training and content, the company aims to equip individuals with the knowledge and skills needed to pass these important professional exams and enhance their career prospects.
Professional skills and interest courses
This segment caters to adults seeking to acquire new practical skills or explore personal interests. The offerings are varied, including courses on wealth management, voice acting, Chinese painting, and calligraphy. These courses are for personal enrichment or to develop specific competencies that might be useful in a professional context, demonstrating Sunlands' commitment to lifelong learning beyond formal academic or certification pathways.
What management is betting on now
Sunlands Technology Group is focused on leveraging its technology and extensive course offerings to meet the evolving needs of adult learners in China. The company emphasizes personalized learning experiences through its proprietary technologies and a strong online platform. Management is likely prioritizing strategies that enhance student engagement and learning outcomes, while adapting to the dynamic educational market and regulatory environment in China. Recent actions, such as a share repurchase program and asset disposals, suggest a focus on strategic financial management and operational efficiency.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$26.75M
FY2025 Q4
$20.96M
Revenue
$288.84M
Net income
$52.28M
Diluted EPS
7.76
Operating cash flow
$20.99M
Free cash flow
$20.96M
Fetching…
Sources
Revenue
$272.66M
Net income
$46.87M
Diluted EPS
6.87
Operating cash flow
$26.79M
Free cash flow
$26.75M
Fetching…
Sources
Is it cheap or expensive?
Fair value $90.80 vs current price $2.55
Our most-likely fair value is $90.80 a share — about 3,460.6% above today's price of $2.55, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $108.5M - more cash than debt. Interest coverage 521.7x.
Net debt
$-108.50M
Interest coverage
521.69x
Sunlands Technology Group is healthier than 0 of 1 peers on balance-sheet leverage.
Healthy
Worse cushion
Baseline
Better cushion
STG
BASELINE
Sunlands Technology Group
Total debt $19.94M Interest coverage 521.69x This is the baseline the peer rows are being compared against.
What you should know
The case for and against STG
2 Rewards
2 Risks
Rewards
-
Revenue grew 5.9% last year.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 260.6% above its 5-year average P/E.
-
Operating margin compressed from 26.6% to 20.5% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
0.74x
Forward P/E
-6.07x
P/B
0.20x
P/S
0.02x
EV/EBITDA
-1.53x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
87.0%
Operating margin
20.5%
Net margin
17.6%
ROE
34.9%
ROA
12.9%
Health
Liquidity and balance-sheet strength
Debt / equity
0.12x
Current ratio
1.63x
Quick ratio
1.45x
Total debt
$19.94M
Total cash
$128.43M
Growth
How the business has been compounding
Revenue TTM
$1.20B
Revenue 5Y CAGR
-7.4%
EPS TTM
3.46
EPS 5Y CAGR
-16.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$68.94M
Free CF TTM
$20.96M
FCF margin
1.7%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2022-06-29