A study conducted by Global Market Insights (GMI) concluded that the global e-learning market will grow 20% per year over the next seven years and cross the $1 trillion mark by 2028. Even faster growth is expected for the Asia-Pacific region and India.
This suggests that the surge in demand for online learning caused by Covid-19 has only triggered what is expected to be a multi-year change in the way we learn.
As high-speed internet access reaches more and more corners of the world, more people will be able to access online learning platforms to advance their education. More courses will be taken, more degrees will be earned, and more employee training will be completed through distance learning experiences as the decade progresses.
The predicted growth has industry incumbents and new challengers clamoring for a piece of the pie. Product offerings, teacher hiring, and technological advancements are growing rapidly.
However, you wouldn’t know that this is a hot area, based on the performance of online education stocks. The education and training services group is down another 20% year-to-date after plunging more than 70% from its pandemic-fueled peak of 2021.
The industry has fallen out of favor amid a deluge of competition and tough year-to-year comparisons. This presented an opportunity for investors who understand the long-term growth trajectory of e-learning.
Gaining knowledge about which stocks to buy should involve studying these three companies.
What is a good edtech stock?
2U, Inc. (NASDAQ: TWOU) is a cloud-based software provider that enables nonprofit colleges and universities to educate students remotely. In addition to this technology, it offers a range of undergraduate and graduate programs unique to them.
The company’s daily bread, however, helps educational institutions convert their course materials and expertise into e-learning solutions that meet the needs of the modern student. 2U is best known for its free programs that allow students to earn degrees and certificates without setting foot on a college campus.
Last week, 2U reported a 9% increase in first-quarter revenue, but a net loss that nearly doubled to $18.5 million. A 35% increase in costs was largely related to non-cash one-time charges, but also increased operating expenses to support growth plans.
2U’s growth initiatives revolve around the integration of recently acquired edX. Over time, the company aims to expand its more than 4,000 offerings to establish itself as the preferred digital transformation partner for universities around the world.
What does Adtalem Global Education do?
Adtalem Global Education Inc. (NYSE: ATGE) is the company behind half a dozen healthcare-focused online, on-campus, and hybrid universities. Chamberlain University offers nursing programs while three separate schools offer degree and non-degree programs in medicine, including veterinary medicine. Then there’s the recently acquired Walden University, which has added more than 100 online health certificate and degree programs.
The company’s expanding portfolio helps healthcare employers meet their critical workforce needs at a time when frontline healthcare professionals have become everyday heroes. Although student enrollment has slowed lately due to Covid-related challenges, over time Adtalem expects demand for medical professionals to exceed supply, as it always has. . The growing demand is expected to attract more people to the profession and, in turn, create stable demand for the company’s various healthcare offerings.
Analysts expect Adtalem’s earnings per share to top $3.00 for the first time in 2023. That means the stock can be held for around 10 times next year’s earnings estimate. , a small price to pay for access to health education spending in the post-pandemic period. world.
Is strategic education stock a buy?
Strategic Education, Inc. (NASDAQ: STRA), or SEI, is the parent company of Strayer University, home of the renowned Jack Welch Management Institute MBA program. The for-profit online institution was founded more than a decade ago by former General Electric CEO Jack Welch with his wife Suzy, a well-known author. It’s also the company behind the New York Code and Design Academy, a popular destination for career-minded students interested in software development.
While most of SEI’s revenue comes from the US, nearly a quarter comes from the Australia/New Zealand market where e-learning is also growing rapidly following repeated Covid lockdowns. As has been a theme in e-learning, declining enrollment numbers from the extraordinary growth of 2021 has caused short-sighted investors to leave the space. SEI shareholders have experienced the same with listings down 13% in the last quarter and the stock down sharply from its Covid peak.
The good news is that long-term investors can pounce on a major online education player with solid assets and finances. SEI’s cash position has already jumped 8% this year, giving it enough cash to pay the bills and invest for the future. The company is also one of the most shareholder-friendly names in education with an active buyback program and a 3.7% forward dividend.
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