雅虎香港財經 10 Best Education Stocks To Buy In 2023
In this article, we discuss 10 best education stocks to buy in 2023. If you want to see more stocks in this selection, check out 5 Best Education Stocks To Buy In 2023.
In 2022, the worldwide market for higher education was valued at $20.1 billion, and it is predicted to grow at a compounded annual growth rate of 20.2% during the period from 2023 to 2028, reaching $61.1 billion. Additionally, the online education sector is projected to expand by $148.22 billion between 2022 and 2027, with a CAGR of 9.49% during the forecasted timeframe.
The education and training expenditure worldwide is anticipated to hit $10 trillion by 2030, fueled by population growth in developing markets and technology, which drives a significant expansion of re-skilling and up-skilling in developed economies. Over the next ten years, there will be around 350 million more post-secondary graduates and nearly 800 million additional K12 graduates compared to the present day. This expansion is primarily driven by Asia and Africa. To meet global demand, there is a requirement to add approximately 1.5 million teachers each year, leading to a total of around 100 million teachers. Half of these teachers will be responsible for Pre-K and Primary education. Post-secondary teaching will also undergo significant expansion.
The higher education market is experiencing growth due to a rise in student enrolments worldwide, as well as an increase in globalization. Additionally, companies seek individuals with specialized degrees to adapt to technological advancements, and artificial intelligence and the internet of things are being integrated into higher education systems to enhance personalized learning. The digitization of the education sector, consumers' increased spending capacity, and government scholarship programs are all contributing to the market's positive growth. The availability of high-speed internet connectivity and personal computing devices has led to the introduction of collaborative and e-learning solutions, which is expected to further fuel the higher education market in the future.
To benefit from the boom in the education sector, some of the best education stocks to buy this year include Chegg, Inc. (NYSE:CHGG), TAL Education Group (NYSE:TAL), and New Oriental Education & Technology Group Inc. (NYSE:EDU).
Our Methodology
We scanned Insider Monkey's database of 943 hedge funds and picked top 10 companies that provide services in the education sector with the highest number of hedge fund investors. These are the best education stocks to buy according to hedge funds.
Monkey Business Images/Shutterstock.com
Best Education Stocks To Buy In 2023
10. 2U, Inc. (NASDAQ:TWOU)
Number of Hedge Fund Holders: 20
2U, Inc. (NASDAQ:TWOU) operates as an online education platform company in the United States and internationally. The company has two segments, Degree Program and Alternative Credential. The company reported a Q4 non-GAAP EPS of $0.23 and a revenue of $236 million, outperforming Wall Street estimates by $0.02 and $1.28 million, respectively. 2U, Inc. (NASDAQ:TWOU) expects FY 2023 revenue to be between $985 million to $995 million, whereas the consensus revenue estimate is $985.63 million.
On March 31, Morgan Stanley reduced the price target for 2U, Inc. (NASDAQ:TWOU) from $11 to $10 while maintaining an Equal Weight rating on the shares. The firm has reviewed three education software platform operators following their investor days and remains doubtful about their ability to achieve higher growth and significantly better margins in the long term. However, Morgan Stanley noted that the current valuations of the group imply even worse outcomes.
According to Insider Monkey’s fourth quarter database, 20 hedge funds were bullish on 2U, Inc. (NASDAQ:TWOU), compared to 17 funds in the prior quarter. Cathie Wood’s ARK Investment Management is the largest stakeholder of the company, with 9.16 million shares worth $57.4 million.
Like Chegg, Inc. (NYSE:CHGG), TAL Education Group (NYSE:TAL), and New Oriental Education & Technology Group Inc. (NYSE:EDU), 2U, Inc. (NASDAQ:TWOU) is one of the best education stocks to invest in.
Here is what ClearBridge Investments Small Cap Strategy has to say about 2U, Inc. (NASDAQ:TWOU) in its Q4 2021 investor letter:
“The lingering pandemic continues to cause volatility across sectors. Among detractors for the quarter, after online education tech company 2U received a boost from the move to online education at the outset of the COVID-19 pandemic, attention has now turned to a tight labor market that has historically led to softer enrollments. Although 2U exceeded third-quarter expectations and closed on its acquisition of edX in the fourth quarter, weak results from educational services provider Chegg seemingly confirmed the market’s enrollment concerns and weighed on 2U. Nevertheless, we continue to believe the long-term prospects for 2U are much brighter than are embedded in the stock today.”
9. Stride, Inc. (NYSE:LRN)
Number of Hedge Fund Holders: 21
Stride, Inc. (NYSE:LRN) is an education service company that uses technology to provide online curriculum, software systems, and educational services to enable personalized learning for students, primarily in K-12 grade levels. Stride, Inc. (NYSE:LRN) was founded in 2000 and is headquartered in Reston, Virginia. On January 24, the company reported a FQ2 GAAP EPS of $1.19 and a revenue of $458.4 million, topping analysts’ estimates by $0.12 and $15.17 million, respectively. The December quarter ended with over 180,000 enrollments.
On March 10, Greg Parrish, an analyst at Morgan Stanley, lowered Stride, Inc. (NYSE:LRN)’s rating from Overweight to Equal Weight and maintained the stock's price target of $46. Although the stock has outperformed the market by 36% year-to-date, Parrish believes that the current valuation reflects a more balanced risk/reward. In a research note to investors, he expresses confidence in Stride, Inc. (NYSE:LRN)’s potential for growth, but noted that concerns about enrollment are now factored into the stock's value.
According to Insider Monkey’s fourth quarter database, 21 hedge funds were long Stride, Inc. (NYSE:LRN), up from 16 funds in the prior quarter.
Wasatch Micro Cap Value Fund released its Q4 2020 investor letter and mentioned Stride, Inc. (NYSE:LRN). Here is what the fund said:
“The largest detractor from Fund performance for the fourth quarter was Stride, Inc. (LRN), formerly known as K12, Inc. This technology-based education company offers proprietary curriculum, software and services created for online delivery to students in kindergarten through 12th grade. The stock declined despite reasonably strong enrollment. In hindsight, we underestimated investor concerns that there’ll be considerably lower demand for the company’s services as the economy reopens more fully. Nevertheless, we believe those concerns may be overblown and it’s possible the pandemic has changed parents’ and students’ mindsets toward online education. Therefore, we think annual growth—even after the pandemic ends—could be at double-digit rates. This is because the industry itself and Stride’s market share both have plenty of room to expand. Moreover, any reluctance to give Stride a try could be reduced because the company’s fees are paid by schools, not by parents. And Stride is expanding by also offering at-home services that are integrated with school-based education.”
8. Grand Canyon Education, Inc. (NASDAQ:LOPE)
Number of Hedge Fund Holders: 22
Grand Canyon Education, Inc. (NASDAQ:LOPE) offers education services to colleges and universities in the United States. These services include technology solutions such as a learning management system, internal administration, infrastructure, and support services. They also offer academic services, such as program and curriculum development, faculty training and development, class scheduling, and access to skills and simulation lab sites. Additionally, Grand Canyon Education, Inc. (NASDAQ:LOPE) provides counseling services and support, including admission, financial aid, field experience, and other counseling services. For Q1 2023, Grand Canyon Education, Inc. (NASDAQ:LOPE) expects service revenue of between $249.0 million and $250.0 million, and earnings per share of between $1.90 and $1.93. It is one of the best education stocks to invest in.
On February 17, Barrington increased the price target for Grand Canyon Education, Inc. (NASDAQ:LOPE) from $110 to $130 and maintained an Outperform rating on the shares. This decision was made after the company reported Q4 revenue and earnings that surpassed the firm's expectations and provided initial 2023 guidance above the consensus. Barrington views the company positively, citing a valuation discount compared to its Ed Tech peer group, along with accelerating revenue and earnings, as well as a recent increase in new online student enrollment growth.
According to Insider Monkey’s fourth quarter database, 22 hedge funds were bullish on Grand Canyon Education, Inc. (NASDAQ:LOPE), compared to 18 funds in the earlier quarter. Cliff Asness’ AQR Capital Management is the largest stakeholder of the company, with 393,604 shares worth $41.5 million.
Diamond Hill Long-Short Fund made the following comment about Grand Canyon Education, Inc. (NASDAQ:LOPE) in its Q4 2022 investor letter:
“Other bottom contributors included our long positions in Alphabet and Meta and our short position in Grand Canyon Education, Inc. (NASDAQ:LOPE). Post-secondary education services company Grand Canyon Education (LOPE) is benefiting from a positive inflection in online enrollment at Grand Canyon University (GCU), LOPE’s main client. This positive inflection may reflect some counter cyclical demand for education as people anticipate a slowing economy and therefore return to school to finish or obtain a degree. Shares responded positively to this inflection, which is expected to similarly increase net online enrollment in 2023’s first half. Longer term, we have doubts about LOPE’s growth prospects in a crowded field and as many for-profit universities (including LOPE) face challenges — and heightened regulatory scrutiny — shifting to a non-profit business model.”
7. American Public Education, Inc. (NASDAQ:APEI)
Number of Hedge Fund Holders: 24
American Public Education, Inc. (NASDAQ:APEI) is a provider of postsecondary education, delivered both online and through physical campuses. The company operates through three segments – American Public University System, Rasmussen University, and Hondros College of Nursing. It offers a wide range of programs, including degree programs and certificate programs in fields such as nursing, public health, public administration, and business administration. It is one of the top education stocks to invest in.
On March 15, Barrington analyst Alexander Paris maintained an Outperform rating on American Public Education, Inc. (NASDAQ:APEI) but lowered the firm's price target on the shares to $10 from $15. This adjustment was made due to the company's Q1 guidance falling short of expectations. The analyst has lowered his earnings estimates for the short term, but still anticipates a rebound in demand for cost-effective online higher education in the future.
According to Insider Monkey’s fourth quarter database, 24 hedge funds were bullish on American Public Education, Inc. (NASDAQ:APEI), compared to 17 funds in the last quarter. Jonathan Kolatch’s Redwood Capital Management is the largest stakeholder of the company, with 1.85 million shares worth $22.7 million.
6. Coursera, Inc. (NYSE:COUR)
Number of Hedge Fund Holders: 24
Coursera, Inc. (NYSE:COUR) manages an online platform for educational content that connects learners, educators, organizations, and institutions. The platform provides a variety of online courses in subjects such as data science, business, computer science, physical science and engineering, language learning, information technology, health, social sciences, math and logic, project management, and arts and humanities. In Q4 2022, Coursera, Inc. (NYSE:COUR)’s Consumer revenue came in at $79.8 million, up 21% from the prior year quarter, given continued demand for industry microcredentials, particularly for its entry-level Professional Certificate catalog. Similarly, Enterprise revenue was $50.5 million, up 41% from a year ago due to growth across business, campus, and government customers.
On March 31, Morgan Stanley analyst Josh Baer maintained an Overweight rating on Coursera, Inc. (NYSE:COUR) but lowered the firm's price target on the shares to $17 from $18.
According to Insider Monkey’s fourth quarter database, 24 hedge funds were bullish on Coursera, Inc. (NYSE:COUR), compared to 22 funds in the prior quarter. Gilchrist Berg’s Water Street Capital is the biggest stakeholder of the company, with 1.13 million shares worth $13.3 million.
In addition to Chegg, Inc. (NYSE:CHGG), TAL Education Group (NYSE:TAL), and New Oriental Education & Technology Group Inc. (NYSE:EDU), smart investors are piling into Coursera, Inc. (NYSE:COUR) for exposure to the education sector.
Here is what ClearBridge SMID Cap Growth Strategy has to say about Coursera, Inc. (NYSE:COUR) in its Q3 2021 investor letter:
“We also added two positions in the IPO aftermarket, (one is) online education portal Coursera. Coursera, which makes academic courses from some of the world’s leading universities available through its platform and offers online degree programs, saw its shares trade lower following its March IPO but has seen significant uptake for its services since the onset of COVID.”
Click to continue reading and see 5 Best Education Stocks To Buy In 2023.
Suggested articles:
Disclosure: None. 10 Best Education Stocks To Buy In 2023 is originally published on Insider Monkey.
