NYSE:BEDU

Stock Analysis Report

Bright Scholar Education Holdings

Executive Summary

Bright Scholar Education Holdings Limited operates K-12 schools in China.

Rewards

Trading at 64.2% below its fair value

Revenue is forecast to grow 20.8% per year

Risk Analysis

Has a high level of debt

Profit margins (9.4%) are lower than last year (14.4%)



Snowflake Analysis

Excellent balance sheet and slightly overvalued.


Similar Companies

Share Price & News

How has Bright Scholar Education Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: BEDU has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.7%

BEDU

0.7%

US Consumer Services

0.3%

US Market


1 Year Return

-17.2%

BEDU

27.4%

US Consumer Services

18.5%

US Market

Return vs Industry: BEDU underperformed the US Consumer Services industry which returned 27.4% over the past year.

Return vs Market: BEDU underperformed the US Market which returned 18.5% over the past year.


Shareholder returns

BEDUIndustryMarket
7 Day-4.7%0.7%0.3%
30 Day0%3.6%1.5%
90 Day-7.2%6.0%5.7%
1 Year-16.5%-17.2%27.9%27.4%21.1%18.5%
3 Yearn/a102.9%91.8%45.9%36.4%
5 Yearn/a141.9%115.0%71.4%52.5%

Price Volatility Vs. Market

How volatile is Bright Scholar Education Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Bright Scholar Education Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: BEDU ($8.96) is trading below our estimate of fair value ($25.01)

Significantly Below Fair Value: BEDU is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: BEDU is poor value based on its PE Ratio (32x) compared to the Consumer Services industry average (28.2x).

PE vs Market: BEDU is poor value based on its PE Ratio (32x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate BEDU's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: BEDU is overvalued based on its PB Ratio (2.8x) compared to the US Consumer Services industry average (2.1x).


Next Steps

Future Growth

How is Bright Scholar Education Holdings forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

20.8%

Forecasted annual revenue growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if BEDU's forecast earnings growth is above the savings rate (1.7%).

Earnings vs Market: Insufficient data to determine if BEDU's earnings are forecast to grow faster than the US market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: BEDU's revenue (20.8% per year) is forecast to grow faster than the US market (7.4% per year).

High Growth Revenue: BEDU's revenue (20.8% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BEDU's Return on Equity is forecast to be low in 3 years time (14.2%).


Next Steps

Past Performance

How has Bright Scholar Education Holdings performed over the past 5 years?

46.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BEDU has high quality earnings.

Growing Profit Margin: BEDU's current net profit margins (9.4%) are lower than last year (14.4%).


Past Earnings Growth Analysis

Earnings Trend: BEDU has become profitable over the past 5 years, growing earnings by 46% per year.

Accelerating Growth: BEDU's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: BEDU had negative earnings growth (-2.4%) over the past year, making it difficult to compare to the Consumer Services industry average (7.1%).


Return on Equity

High ROE: BEDU's Return on Equity (8.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Bright Scholar Education Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: BEDU's short term assets (CN¥3.8B) exceed its short term liabilities (CN¥2.5B).

Long Term Liabilities: BEDU's short term assets (CN¥3.8B) exceed its long term liabilities (CN¥2.2B).


Debt to Equity History and Analysis

Debt Level: BEDU's debt to equity ratio (69.9%) is considered high.

Reducing Debt: BEDU had negative shareholder equity 5 years ago, but is now positive and has therefore improved.

Debt Coverage: BEDU's debt is well covered by operating cash flow (40.1%).

Interest Coverage: BEDU earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: BEDU has a low level of unsold assets or inventory.

Debt Coverage by Assets: BEDU's debt is covered by short term assets (assets are 1.7x debt).


Next Steps

Dividend

What is Bright Scholar Education Holdings's current dividend yield, its reliability and sustainability?

1.10%

Current Dividend Yield


Dividend Yield vs Market

company1.1%marketbottom25%1.4%markettop25%3.7%industryaverage2.1%forecastin3Years0.7%

Current dividend yield vs market & industry

Notable Dividend: BEDU's dividend (1.1%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: BEDU's dividend (1.1%) is low compared to the top 25% of dividend payers in the US market (3.7%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether BEDU's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if BEDU's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (36.3%), BEDU's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of BEDU's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Bright Scholar Education Holdings's salary, the management and board of directors tenure and is there insider trading?

2.6yrs

Average board tenure


CEO

Derek Feng (53yo)

0.9yrs

Tenure

0

Mr. Derek Feng has been Chief Executive Officer at Bright Scholar Education Holdings Limited since January 21, 2019. He serves as Director of CIBT School of Business & Technology Corp. Mr. Feng is Director ...


Board Age and Tenure

2.6yrs

Average Tenure

50.5yo

Average Age

Experienced Board: BEDU's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Derek Feng (53yo)

    Chief Executive Officer

    • Tenure: 0.9yrs
  • Jerry He (45yo)

    Executive Vice Chairman

    • Tenure: 0.9yrs
  • Dongmei Li (50yo)

    Chief Financial Officer

    • Tenure: 2.8yrs
  • Ruby Yim

    Investor Relations Counsel

    • Tenure: 0yrs

Board Members

  • Ron Packard (56yo)

    Independent Director

    • Tenure: 1.6yrs
  • Peter Andrew Schloss (59yo)

    Independent Director

    • Tenure: 2.6yrs
  • Huiyan Yang (37yo)

    Chairperson

    • Tenure: 0yrs
  • Jun Zhao (57yo)

    Independent Director

    • Tenure: 2.6yrs
  • Jerry He (45yo)

    Executive Vice Chairman

    • Tenure: 0.9yrs
  • Shuting Zhou (34yo)

    Independent Director

    • Tenure: 2.6yrs

Company Information

Bright Scholar Education Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Bright Scholar Education Holdings Limited
  • Ticker: BEDU
  • Exchange: NYSE
  • Founded: 1994
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: US$1.145b
  • Shares outstanding: 124.49m
  • Website: https://www.brightscholar.com

Number of Employees


Location

  • Bright Scholar Education Holdings Limited
  • No.1, Country Garden Road
  • Beijiao Town
  • Foshan
  • Guangdong Province
  • 528300
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
BEDUNYSE (New York Stock Exchange)YesSPONSORED ADSUSUSDMay 2017

Biography

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  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 00:48
End of Day Share Price2019/12/06 00:00
Earnings2019/08/31
Annual Earnings2019/08/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.