Comparing Bright Scholar Education Holdngs (BEDU) & K12 (NYSE:LRN)

Bright Scholar Education Holdngs (NYSE:BEDU) and K12 (NYSE:LRN) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.

Earnings & Valuation

This table compares Bright Scholar Education Holdngs and K12’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bright Scholar Education Holdngs $201.61 million 6.41 $26.11 million $0.25 40.60
K12 $917.73 million 0.74 $27.62 million $0.68 25.32

K12 has higher revenue and earnings than Bright Scholar Education Holdngs. K12 is trading at a lower price-to-earnings ratio than Bright Scholar Education Holdngs, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bright Scholar Education Holdngs and K12’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bright Scholar Education Holdngs 14.37% 12.61% 7.75%
K12 3.01% 4.72% 3.67%

Risk & Volatility

Bright Scholar Education Holdngs has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500. Comparatively, K12 has a beta of -0.04, meaning that its stock price is 104% less volatile than the S&P 500.

Insider & Institutional Ownership

13.2% of Bright Scholar Education Holdngs shares are held by institutional investors. Comparatively, 82.7% of K12 shares are held by institutional investors. 9.6% of K12 shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Bright Scholar Education Holdngs and K12, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bright Scholar Education Holdngs 0 1 2 0 2.67
K12 0 0 2 0 3.00

Bright Scholar Education Holdngs presently has a consensus price target of $17.00, indicating a potential upside of 67.49%. K12 has a consensus price target of $20.50, indicating a potential upside of 19.05%. Given Bright Scholar Education Holdngs’ higher possible upside, analysts clearly believe Bright Scholar Education Holdngs is more favorable than K12.

Summary

Bright Scholar Education Holdngs beats K12 on 7 of the 13 factors compared between the two stocks.

About Bright Scholar Education Holdngs

Bright Scholar Education Holdings Limited operates K-12 schools in China. Its schools comprise international schools, bilingual schools, and kindergartens. The company also offers a range of complementary education services, including international camps and after-school programs. As of May 31, 2018, it had a network of 67 schools with approximately 35,275 students. The company was founded in 1994 and is based in Foshan, China.

About K12

K12 Inc., a technology-based education company, together with its subsidiaries, provides online curriculum, software systems, and educational services to facilitate individualized learning for students primarily in kindergarten through 12th grade in the United States and internationally. The company also offers curriculum and technology solutions for full-time virtual and blended programs; full-time virtual programs, semester courses, and supplemental educational products; teacher training, teaching, and other academic and technology support services to public schools, school districts, private schools, charter schools, early childhood learning centers, and corporate partners. In addition, it provides FuelEd suite of offerings, such as K12 curriculum, FuelEd online courses, and FuelEd anywhere learning systems; Middlebury interactive languages; Stride; and the Big Universe literacy solution. Further, the company operates online private schools, including The K12 International Academy, the George Washington University Online High School, and the Keystone School. Additionally, it provides access to the online lessons and curriculum through proprietary learning management system; learning kits; student computers; and management, technology, and educational services. The company sells individual K-8 online courses and supplemental educational products directly to families. K12 Inc. was founded in 2000 and is headquartered in Herndon, Virginia.

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