Financial Analysis: K12 (NYSE:LRN) versus Nord Anglia Education (NORD)
Nord Anglia Education (NYSE: NORD) and K12 (NYSE:LRN) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, earnings, analyst recommendations, institutional ownership and profitabiliy.
This table compares Nord Anglia Education and K12’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Nord Anglia Education||6.07%||22.86%||3.01%|
This is a breakdown of recent recommendations and price targets for Nord Anglia Education and K12, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Nord Anglia Education||1||5||2||0||2.13|
Nord Anglia Education presently has a consensus price target of $30.50, suggesting a potential downside of 7.27%. K12 has a consensus price target of $17.00, suggesting a potential downside of 6.80%. Given K12’s stronger consensus rating and higher probable upside, analysts clearly believe K12 is more favorable than Nord Anglia Education.
Valuation and Earnings
This table compares Nord Anglia Education and K12’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Nord Anglia Education||$889.10 million||3.85||$175.20 million||$0.51||64.49|
|K12||$894.08 million||0.83||$42.05 million||$0.14||130.29|
Nord Anglia Education has higher revenue, but lower earnings than K12. Nord Anglia Education is trading at a lower price-to-earnings ratio than K12, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
34.4% of Nord Anglia Education shares are held by institutional investors. Comparatively, 79.2% of K12 shares are held by institutional investors. 2.7% of Nord Anglia Education shares are held by insiders. Comparatively, 18.3% of K12 shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Risk & Volatility
Nord Anglia Education has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, K12 has a beta of -0.21, suggesting that its share price is 121% less volatile than the S&P 500.
Nord Anglia Education beats K12 on 8 of the 14 factors compared between the two stocks.
Nord Anglia Education Company Profile
Nord Anglia Education, Inc. is an operator of international schools. As of August 31, 2016, the Company taught over 37,000 students, from kindergarten through the end of secondary school (K-12), at its 43 schools in China, Europe, the Middle East, South East Asia and North America. The Company’s segments include China, Europe, Middle East (ME), Southeast Asia (SEA), North America and Other. The China segment includes its activities in the People’s Republic of China and the Hong Kong Special Administrative Region. The Europe segment includes the Company’s activities in Switzerland, Slovakia, Hungary, the Czech Republic, Spain and Poland. The ME segment includes the Company’s activities in the United Arab Emirates and Qatar. The SEA segment includes the Company’s activities in Thailand, Singapore, Cambodia and Vietnam. The North America segment includes the Company’s activities in the United States and Mexico. The Other segment includes the Learning Services division.
K12 Company Profile
K12 Inc. (K12) is a technology-based education company. The Company offers curriculum, software systems and educational services designed to facilitate individualized learning for students in kindergarten through 12th grade (K-12). It provides a continuum of technology-based educational products and solutions to public school districts, public schools, virtual charter schools, private schools and families. The Company offers a set of products and services primarily to three lines of business, which include Managed Public School Programs, which consists of virtual and blended schools; Institutional business, which includes educational products and services sold to school districts, public schools and other educational institutions, and Private Pay Schools and Other, which includes private schools, including international, for which it charges student tuition and direct consumer sales. It sells individual online courses and supplemental educational products directly to families.
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