Yahoo Finance When Will Sunlands Technology Group (NYSE:STG) Breakeven?
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Sunlands Technology Group's (NYSE:STG): Sunlands Technology Group, through its subsidiaries, provides online education services in the People’s Republic of China. On 31 December 2018, the US$505m market-cap posted a loss of -CN¥927.0m for its most recent financial year. As path to profitability is the topic on STG’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for STG.
See our latest analysis for Sunlands Technology Group
According to the 3 industry analysts covering STG, the consensus is breakeven is near. They expect the company to post a final loss in 2019, before turning a profit of CN¥688m in 2020. STG is therefore projected to breakeven around a few months from now. In order to meet this breakeven date, I calculated the rate at which STG must grow year-on-year. It turns out an average annual growth rate of 141% is expected, which signals high confidence from analysts. If this rate turns out to be too aggressive, STG may become profitable much later than analysts predict.
Given this is a high-level overview, I won’t go into details of STG’s upcoming projects, though, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before I wrap up, there’s one issue worth mentioning. STG currently has negative equity on its balance sheet. Accounting methods used to deal with losses accumulated over time can cause this to occur. This is because liabilities are carried forward into the future until it cancels. Oftentimes, losses exist only on paper but other times, it can be a red flag.
Next Steps:
There are too many aspects of STG to cover in one brief article, but the key fundamentals for the company can all be found in one place – STG’s company page on Simply Wall St. I’ve also put together a list of key aspects you should further research:
Valuation: What is STG worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether STG is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Sunlands Technology Group’s board and the CEO’s back ground.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
