Five education stocks to watch as campuses reopen

Highlights

• Chegg, Inc’s (NYSE:CHGG) revenue surged by 30% YoY in Q2, FY21.
  
  
• Stride, Inc’s (NYSE:LRN) revenue rose more than 47% YoY in Q4, FY21.
  
  
• The revenue of Bright Horizons Family Solutions (NYSE:BFAM) jumped 50% YoY in Q2, FY21.

Education stocks have been on investors' radar, with the sector witnessing remarkable growth during the Covid-19 pandemic. The lockdowns had forced educational institutions to shutdown globally. However, it has also led to the growth of technology-driven online education companies.

These companies are adopting new technologies to provide online classes to students in the comfort of their homes. Therefore, it is not surprising that they have been gaining popularity. Although there have been criticisms, the education-tech sector is breaking new grounds and helping more students enrol in online courses today.

Here we explore five education stocks that might further expand in the future.

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Chegg, Inc. (NYSE:CHGG)

Chegg is an education technology company based in Santa Clara, California, and offers book rentals, online tuition classes, and other related services.

Its shares traded at US$68.30 at 2:08 pm ET on October 4, down by 0.47 percent from its closing price of October 1. The stock value decreased by 21.42 percent YTD. The firm has a market cap of US$9.19 billion and a forward P/E one year of 78.87. Its EPS is US$-0.40.

The 52-week highest and lowest stock prices were US$115.21 and US$64.80, respectively. Its trading volume was 1,461,441 on October 1.

The company's net revenue increased by 30 percent YoY to US$198.5 million in Q2, FY21. Its net income came in at US$32.76 million, compared to US$10.58 million in Q2, FY20.

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Stride, Inc. (NYSE:LRN)

Stride is a for-profit education company based in Herndon, Virginia. It provides general education and career-learning services to pupils.

The stock was priced at US$35.94 at 3:58 pm ET on October 4, up 0.62 percent from its previous closing price. The LRN stock rose 69.93 percent YTD. The market cap of the company is US$1.49 billion, the P/E ratio is 20.91, and the forward P/E one year is 20.30. Its EPS is US$1.72.

The highest and lowest stock price for the last 52 weeks were US$37.21 and US$20.39, respectively. Its share volume on October 1 was 275,587.

The company's revenue was US$397.51 million in Q4, FY21, representing an increase of 47.8 percent YoY. Its net income came in at US$10.49 million, compared to US$4.88 million in Q4, FY21.

The revenue jumped 47.7 percent YoY to US$1.53 billion in fiscal 2021. Its net income rose 191.6 percent YoY to US$71.45 million.

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New Oriental Education and Technology Group, Inc. (NYSE:EDU)

New Oriental Education & Technology Group is an education company based in Beijing. It offers private educational services in China.

The shares traded at US$1.96 at 3:59 pm ET on October 4, down 6.22 percent from its closing price of October 1. Its stock value plunged 87.99 percent YTD. The firm has a market cap of US$3.30 billion, a P/E ratio of 8.13, and a forward P/E one year of 8.71. Its EPS is US$0.24.

The highest and lowest prices of the stocks for the last 52 weeks were US$19.97 and US$1.68, respectively. Its trading volume was 43,566,070 on October 1.

The net revenue of the company surged 29 percent YoY to US$1.19 billion in Q3, FY21. Its attributable net income came in at US$151.89 million, compared to US$137.71 million in Q3, FY20.

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Bright Horizons Family Solutions (NYSE:BFAM)

Bright Horizons is a childcare solutions provider based in Newton, Massachusetts. It offers various educational services like tuition and other related services.

The stock was priced at US$151.28 at 4:00 pm ET on October 4, up 3.79 percent from its previous closing price. The BFAM stock fell 11.35 percent YTD. The market cap of the company is US$9.16 billion, the P/E ratio is 420.22, and the forward P/E one year is 76.31. Its EPS is US$0.36.

The highest and lowest stock prices of the firm for the last 52 weeks were US$182.50 and US$131.01, respectively. Its share volume on October 1 was 424,799.

The company's revenue surged 50 percent YoY to US$441 million in Q2, FY21. Its net income came in at US$18.81 million, compared to US$359 thousand in Q2, FY20.

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Source: Pixabay

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2U, Inc. (NASDAQ:TWOU)

2U, Inc. is an educational technology company based in Lanham, Maryland. It has contracts with non-profit colleges and universities for offering online degree courses.

The shares traded at US$33.95 at 4:01 pm ET on October 4, down 1.14 percent from its closing price of October 1. Its stock value tumbled 12.17 percent YTD. The firm has a market cap of US$2.53 billion and a forward P/E one year of -17.79. Its EPS is US$-2.20.

The highest and lowest prices of the stocks for the last 52 weeks were US$59.74 and US$28.45, respectively. Its trading volume was 765,834 on October 1.

The revenue increased by 30 percent YoY to US$237.2 million in Q2, FY21. It reported a net loss of US$21.83 million, against a loss of US$66.16 million in Q2, FY20.

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Bottomline

The sector is seeing increased investments in recent times, evident from the flurry of technology-powered online education companies breaking new grounds in an already crowded education market. As a result, the education stocks are gaining renewed attention from investors. For instance, the S&P 1500 education services index rose 0.42 percent QTD, while its PE was 11.30. However, investors should evaluate the companies carefully before investing in stocks.