Sunlands Technology Group (STG) Stock Analysis
Sunlands Technology Group
▾ What's in the 33/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). It excludes the Altman Z score, whose retained-earnings input this filer does not report separately. See the Financial Health section for the full balance-sheet read.
How to read STG (speculative micro-cap)
No model can pin a precise fair value on a company this small — but that does not mean there is nothing to learn. The useful questions are what the price is betting on, and whether the company can survive long enough to deliver it.
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1
Reverse-DCF — what growth the price assumes ↓
The single most useful number here: it backs out the growth the market is paying for. If that figure is "historically unprecedented," the price is running on hype, not fundamentals.
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2
Cash runway ↓
A pre-profit micro-cap lives or dies on whether it can fund itself to profitability before running out of money and diluting you.
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3
The raw financial statements + the 10-K ↓
At this scale, the actual numbers, insider ownership, and share-count trend tell you more than any ratio.
STG looks like a foreign company (ADR) whose SEC filings are denominated in its home currency, while the share price is in U.S. dollars. Mixing the two would produce a meaningless dollar fair-value, so we suppress the single intrinsic-value number rather than show a wrong one.
What to use instead: the growth trends, margins and ratios below (which are currency-independent), the peer comparison, and the company's own filings. A currency-converted valuation is on our roadmap.
How to read a company this small
STG is too small and/or too volatile for the valuation lenses we use on larger, more stable companies. The numbers shown below should be taken as rough orientation only.
- Market cap $19.9M — nano-cap territory (below $50M)
Growth percentages on tiny revenue bases (1000% going from $200K to $2M is not predictive). P/E and ROE swing wildly with small earnings changes. Peer comparisons fail because there often aren't comparable companies at this scale.
Start with the Reverse-DCF above — it backs out the growth the price is betting on; if that figure is "historically unprecedented," the price is running on hype, not fundamentals. Then the cash runway (can it fund itself to profitability before diluting you?). Then the raw Financials table and the 10-K on SEC EDGAR — at this scale, insider ownership and the share-count trend often matter more than any ratio.
Classified as Speculative Nano / Micro-cap (confidence 80%). Disagree? An admin can override via the post edit screen.
⚠ Genuine comparables are scarce at this size, so peer multiples are unreliable here. Treat as rough context only — see 📍 What to focus on above.
How does STG stack up against its closest peers?
Ideally we compare STG only to same-industry peers, but too few exist in our universe right now, so the basket below mixes in broader-sector names. Treat the multiples as rough context, not a valuation. For a leveraged business, EV/EBIT and FCF yield (both in the table) are usually more reliable than EV/Sales, because revenue multiples ignore differences in margins and debt.
▾ What's "EV / Sales" in plain English?
EV (Enterprise Value) = market cap + total debt − cash. It's "what you'd pay to buy the entire company outright" — you pay the market cap to shareholders and take over their debt, but you keep their cash. EV is fairer than market cap alone because it includes the debt the new owner inherits.
EV / Sales = EV ÷ annual revenue. So "2.5×" means investors pay $2.50 of enterprise value per $1 of yearly sales. Higher = market is paying more per dollar of sales (usually because they expect future growth or fat margins).
p25 / median / p75 are the 25th, 50th (middle), and 75th percentile of the peers' multiples. Half the peers fall between p25 and p75. The median (p50) is the typical peer — that's the benchmark we compare to.
| EV / SalesEV / Sales — For every $1 of yearly revenue, this is how many dollars investors pay to own the whole business (including debt). Why it matters: Works for pre-profit growth companies where P/E and FCF don't apply. The most apples-to-apples cross-company multiple because it ignores accounting choices. Reference: 1–3x for mature companies · 4–10x for software/SaaS · 10–20x for hypergrowth · >20x is rare and demanding Full explanation → |
0.7x / 0.9x / 8.4x |
| EV / Gross ProfitEV / Gross Profit — Enterprise value divided by gross profit — the multiple paid for what each dollar of sales contributes after direct costs. Why it matters: More refined than EV/Sales for high-margin businesses (software, marketplaces) where gross margin is the real economic engine. Reference: 8–15x for SaaS · 15–25x for hypergrowth software · >30x demanding Full explanation → |
1.9x / 3.2x / 12.7x |
Bold middle number = median peer. Half the peers trade above it, half below. Computed over 7 peers (broad — see caveat); implausible multiples excluded.
⚠️ Important caveat: peer multiples only work if the peers are genuinely comparable. Always check the peer list below — if the auto-picker grabbed micro-caps or unrelated businesses, the comparison is noise. A medical-device giant priced against tiny biotech startups won't produce a useful signal.
▾ View peer list (7)
| Ticker | Company | Industry | Mcap | EV/Sales | EV/GP | EV/EBIT | FCF Yield |
|---|---|---|---|---|---|---|---|
| EEIQ | EpicQuest Education Group Internat | Education | $75M | 8.4x | 12.7x | — | 2.3% |
| NRDY | Nerdy Inc. | Education | $99M | 0.7x | 1.1x | — | 1.0% |
| EDTK | Skillful Craftsman Education Techn | Education ·fallback | $16M | 17.8x | 22.8x | — | 0.3% |
| YOUL | Youlife Group Inc. | Education ·fallback | $40M | 0.2x | 2.1x | 59.5x | 4.5% |
| LFS | LEIFRAS Co., Ltd. | Education ·fallback | $70M | 0.9x | 3.2x | 17.4x | 4.1% |
| AACG | ATA Creativity Global | Education ·fallback | $75M | 2.0x | 4.1x | — | 1.9% |
| WAFU | Wah Fu Education Group Ltd | Education ·fallback | $5M | 0.8x | 1.9x | — | 3.8% |
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
We can't produce a trustworthy Altman Z here: retained earnings weren't separately reported in our data, so a core input would have to be fabricated. Rather than show a categorical "distress" verdict from an invented number, we mark it unavailable. Judge financial health from the leverage, cash position, and the measurable Piotroski checks instead.
Why it matters: High score = fundamentals improving. Low score = deteriorating. Especially powerful for filtering cheap stocks: cheap + high F-score historically outperforms; cheap + low F-score is often a value trap.
Reference: 7–9 = strong · 4–6 = mediocre · 0–3 = weak
Full explanation →
▾ The checks — what passed, what didn't (and what we couldn't measure)
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✓ Positive net incomeNet income $52.3M in FY2025.
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✓ Positive operating cash flowOperating cash flow $21.0M (was $26.8M the prior year).
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✗ Cash flow backs up reported profitOperating cash flow $21.0M vs net income $52.3M.Why this matters: When cash generated exceeds reported earnings, profits are high-quality (not propped up by accruals or one-time items).
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✓ Return on assets improvingReturn on assets 17.9% vs 16.1% a year ago.
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✓ Debt load (vs assets)Total debt is 0.0% of assets vs 1.7% a year ago ($0.0M of $292.8M assets).
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✓ Short-term liquidity (current ratio)Current ratio 1.21x vs 1.10x a year ago.
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✓ Share count (dilution)Share count declined 1.3% (6.8M → 6.7M year-over-year), so the no-dilution check passed. (One-year change; the multi-year buyback pace can differ.)
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✓ Pricing power (gross margin)Gross margin 86.9% vs 84.0% a year ago.
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✓ Sales per asset (asset turnover)Asset turnover 0.99x vs 0.94x a year ago.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
What if you assume different inputs?
Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation → (the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 10.0%, the figure our model used for STG. Open Advanced to also change beta, growth and the rate path.
Note: no headline intrinsic value is published for this stock (the valuation is held for a data-quality reason — see the notes above). The calculator below is a what-if tool: the values it produces are your assumptions played out, not our estimate.
A full intrinsic value isn't shown for STG because the valuation is currently held for a data-quality reason (see the guardrail notes above). The reverse-DCF reading still works — it needs only the price and cash flow — but we won't publish a forward value until the underlying data passes our checks.
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⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
The market is likely discounting the stock due to its declining revenue, which has fallen by 7.4% annually over the last four years. The primary quantifiable risk is the significant revenue decline from $394M to $289M.
As of 3 months ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What's free cash flow / what do these mean?
Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.
Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.
Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.
Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Revenue growth rate in next earnings report
- Operating cash flow trend
- Enrollment numbers for new programs
The trend, in plain numbers (FY2024 → FY2025, latest reported)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Revenue grew +6% to $288.8M.
- Gross margin improved to 87% (+3 pts).
- Net income grew +12% to $52.3M.
- Free cash flow fell to $21.0M.
Management & Leadership
Sunlands Technology Group is led by CEO Tongbo Liu. The company focuses on providing online education services in China.
What They Make
Sunlands Technology Group provides online post-secondary and professional education services, primarily targeting adult learners in China.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
What we use instead: earnings (P/E, EV/EBIT), book value (P/B) — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.
The market prices STG at an 82.6% discount to the model, likely reflecting concerns over its declining revenue, which has fallen by 7.4% per year over the last four years. While net income and operating cash flow are positive, the consistent revenue contraction suggests a shrinking core business that the market is penalizing.
Business Model & Valuation
How They Make Money
The company has positive operating cash flow and has reduced its long-term debt to $0M, indicating self-funding capabilities.
Free Cash Flow DCF
Standard FCF DCF: positive free cash flow in a sector suited for cash-flow-based valuation. FCF negative in 2/5 years.
Show advanced inputs
| Revenue Growth | -7.4% |
| Eps Growth | 11.0% |
| Historical Fcf Growth | 5.0% |
| Sector Default | 5.0% |
| Best Estimate | -3.7% |
| Method | blend(70% revenue_cagr, 30% sector) |
| Growth Basis | total |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project its revenue segments independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue has been declining at -7.4% per year over the last four years.
Geography & Markets
Sunlands Technology Group primarily operates within China, serving its domestic adult education market.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)83.6OverboughtBought up hard recently — stretched; pullbacks are common from here.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BullishLine above signalThe fast trend is above the slow trend — short-term momentum is currently upward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (5 notes — click to expand/collapse)
Guardrail Notes (4)
- Latest FCF/share ($3.11) is only 40% of EPS ($7.76) - using 3yr avg FCF ($3.3/sh) to smooth temporary depression.
- Growth estimate (-3.7%) floored to 2% for stable sector (Consumer Defensive).
- Terminal growth (3%) capped to 1.6% (80% of near-term growth 2%).
- Illiquidity discount 25% applied (small/micro-cap — harder to exit, demand a margin).
FINANCIALS
Financial Statements (5-year tables — click to expand)
From Sunlands Technology Group's SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 288.8M | 52.3M | $7.76 |
| 2024 | 272.7M | 46.9M | $6.87 |
| 2023 | 304.2M | 90.3M | $13.08 |
| 2022 | 336.8M | 93.4M | $13.65 |
| 2021 | 393.5M | 34.4M | $5.11 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC & adj. | Free Cash Flow |
|---|---|---|---|---|
| 2025 | 21.0M | 30,000 | — | 21.0M |
| 2024 | 26.8M | 35,000 | — | 26.8M |
| 2023 | 19.8M | 812,000 | — | 19.0M |
| 2022 | 1.3M | 470,000 | 1.0M | -182,000 |
| 2021 | -58.6M | 2.1M | — | -60.8M |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a trailing 3-year average, not this single year.
Balance Sheet
| Total Assets | 292.8M |
| Total Liabilities | 157.8M |
| Equity | 135.2M |
Similar companies worth a look
Same sector and industry, similar fundamentals shape. Verify everything yourself — this list is computed mechanically and does not reflect our judgment about whether any of these are a good investment.