- Zoom (ZM): The preferred platform for schools, teachers and students to conduct remote learning
- Coursera (COUR): Has more than 97 million registered learners throughout the world
- TAL Education Group (TAL): With the easing of regulations in China, TAL has become more competitive
- Duolingo (DUOL):Has 9.6 million daily active users and is quickly moving toward profitability
According to its latest filings, Genius Group has filed to raise $40 million from an initial public offering (IPO). The company provides various types of educational services that teach people in person and online. This impending IPO has brought education stocks to the forefront once again.
These are solid picks because they offer a high return on investment and there is no risk involved with them. Education stocks have also grown throughout the years due to their strong fundamentals, which makes them ideal for investors and institutions looking for funding opportunities.
The rise in innovative areas such as online instruction has changed the entire industry. E-learning has been widely used for a long time, so its market is expected to be worth $243 billion by 2022. With that in mind, here are four education stocks for your portfolio.
| ZM | Zoom | $113.82 |
| COUR | Coursera | $21.65 |
| TAL | TAL Education Group | $3.44 |
| DUOL | Duolingo | $92.40 |
Zoom (ZM)
2020 Covid restrictions had a considerable impact on the way we conduct business. One of the most significant differences is that meetings are no longer always in person.
This led to revolutionary changes, including the increase in usage of videoconferencing software. The biggest beneficiary was Zoom (NASDAQ:ZM), which became synonymous with online meetings.
In addition to office proceedings, Zoom was also used by schools and teachers to conduct classes. Therefore, it has become an important tool for schools to continue instruction.
At the height of the pandemic, the company reported an increase in revenue of 369% year-over-year (YOY). Nevertheless, it grew just 21% in Zoom’s fourth quarter of fiscal 2022, a downward trend.
But you have to take everything into context. It is unusual to see so much growth, making ZM stock worth considering.
Coursera (COUR)
Coursera (NYSE:COUR) has 97 million registered learners spread throughout the world. It offers online courses on computer science, data science, business, economics, humanities and more. Coursera has also partnered with other institutions to offer degree programs in cybersecurity, data analytics and digital marketing.
Much like other education stocks, the pandemic led to massive growth for the company. Coursera generated over $293.5 million in revenue in 2020 from more than 77 million registered learners.
Although growth has slowed, the company has still increased revenue by a healthy margin. Total revenue grew in 2021, experiencing a 41% increase over the prior year. At the same time, gross profit was a strong $249.5 million, which was 60.1% of revenue and up 61% from last year.
Overall, the trend toward online education is secular. Therefore, the company will continue to do well in the long run. Plus, with people returning to their work or changing professions, they need to learn more skills. This bodes well for Coursera moving forward.
TAL Education Group (TAL)
One of the reasons people are hesitant to invest in China-based stocks is Beijing’s enhanced level of regulatory activity. Therefore, TAL Education Group (NYSE:TAL) can seem like a contrarian play.
However, several positives are too good to ignore. China’s population has been growing exponentially in recent years, and by 2018, more than half were considered members of China’s middle class. The internet penetration rate in China is around 70%, and this number has been increasing steadily. Therefore, there is a huge market for any education tech company.
In addition, Chinese officials are easing regulations after an intense few years. China is reportedly preparing to issue licenses for businesses that will let them offer tutoring services again.
However, it will take time for the company to recover from the issues. A recent report on the company’s Q3 2022 showed almost a 9% decrease in revenue. The fact that it lost money amounting to 9 cents per share is not good. Still, with regulations set to relax, now might be the right time to pour your capital into TAL stock if you are risk-tolerant.
Duolingo (DUOL)
Duolingo (NASDAQ:DUOL) is a free app that teaches users a new language or helps them improve their skills in a language they already know. It uses artificial intelligence (AI) assistants to teach, learn and translate.
The company’s use of AI has led to many improvements in how language learning is done. For example, it has led to a better understanding of how each word should be pronounced, and it has also helped improve reading comprehension skills.
In 2021, Duolingo reached 9.6 million daily active users with more than 500 million total users. Unfortunately, the company is not profitable yet — but it’s getting close. After recording $251 million in revenue last year, it is forecasting revenue between $332 million and $342 million this year.
The one area Duolingo needs to work on is subscriptions. There are only 2.5 million subscribers, representing just 6% of the monthly consumer base. If it can get more users to subscribe, losses will evaporate very soon.
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On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.