IDP Education Limited (ASX: IEL) stock is trading near to its 52-week high of $17.330. Since its listing in 2015, the stock has surged up by 386.18% while its YTD return stands at +68.50%. The stock last traded $16.570 with a price to earnings multiple of 67.330x as at 24 May 2019.
ASX-listed IDP Education Limited is into the business of offering educational services and international placement opportunities to global audience. It is also a joint owner of International English Language Testing System (IELTS), which is a flagship English proficiency test globally.
It’s worth to look at the business structure of the company. IEL works in four division:
- English Language Testing
- Student Placement
- Digital Marketing and Events
- English Language Teaching
The revenue composition of each division (Source: Company’s Macquarie Australia Conference, May 2019)
For the first half of Fiscal 2019, IDP Education Limited has reported 26% growth in revenue to $304 million underpinned by the robust performance across all the sectors. There has been an encouraging improvement in the company’s Student Placement division with Australian placement posting 30% revenue growth and Multi Destination recording 53% revenue growth.
IEL’s Revenue and EBIT by geographic segment (Source: Company’s H1FY19 Presentation, February 2019)
The picture above depicts revenue by geographic segment wherein revenues in Asia grew by 33%, and the rest of the world grew by 30%. Furthermore, Asia represents 67% of revenue and 72% of EBIT out of the group’s total revenue and EBIT, respectively.
One of the most comprehensive datasets around the globe, HolonIQ Platform has reported the most promising outlook from Asia region with the United States and Australia advancing at rapid pace. Its recent survey involving 806 respondents from 63 countries has concluded an overall positive short-term outlook while some of the respondents believe that teacher supply would become an issue once all the Asian K-12 opens fully.
EBITDA increased to A$66.8 million in H1FY19 by 33% as compared to the previous corresponding period (H1FY18). Net Profit After tax was at A$40.7 million in H1FY19, up by 34% against previous corresponding period. These solid numbers reported in the half-yearly results of the company steered a 26% jump in IEL stock price movement within a day.
IEL shared early performance in the latest conference (Source: Company’s Macquarie Australia Conference, May 2019)
During the conference, IEL shed lights on its B2B platform ‘idp connect’. It is a client services division born out of the merger of Hotcourses and IDP B2B teams. The presentation depicts a client base of over 680 universities and educators globally. idp connect provides solutions for the institution to recruit and engage students around the world and also offers content services to attract and nurture students, connecting lead with IDP’s physical network of advisors and support.
IEL presented early insights from the idp connect segment (Source: Company’s Macquarie Australia Conference, May 2019)
The short-term outlook of the company looks more attractive in the season of university admission standing close. With this, the enrolment numbers in IELTS is expected to grow further, taking the group’s overall revenue on upward trend.
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