Comparing Zovio (NASDAQ:ZVO) and Sunlands Technology Group (NYSE:STG)

Zovio (NASDAQ:ZVO) and Sunlands Technology Group (NYSE:STG) are both small-cap business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, dividends, risk, valuation, earnings and institutional ownership.

Insider and Institutional Ownership

49.4% of Zovio shares are owned by institutional investors. Comparatively, 1.7% of Sunlands Technology Group shares are owned by institutional investors. 7.6% of Zovio shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Zovio and Sunlands Technology Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Zovio -20.40% -0.38% -0.14%
Sunlands Technology Group -10.77% N/A -8.42%

Volatility and Risk

Zovio has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500. Comparatively, Sunlands Technology Group has a beta of 1.73, suggesting that its share price is 73% more volatile than the S&P 500.

Valuation & Earnings

This table compares Zovio and Sunlands Technology Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Zovio $397.12 million 0.20 -$48.95 million $0.27 8.85
Sunlands Technology Group $337.75 million 0.24 -$65.98 million N/A N/A

Zovio has higher revenue and earnings than Sunlands Technology Group.

Analyst Recommendations

This is a summary of current recommendations and price targets for Zovio and Sunlands Technology Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Zovio 0 0 2 0 3.00
Sunlands Technology Group 0 0 0 0 N/A

Zovio currently has a consensus price target of $6.25, indicating a potential upside of 161.51%. Given Zovio’s higher probable upside, research analysts clearly believe Zovio is more favorable than Sunlands Technology Group.

Summary

Zovio beats Sunlands Technology Group on 8 of the 12 factors compared between the two stocks.

Zovio Company Profile

Zovio, Inc. provides postsecondary education services. Through Ashford University and University of the RockiesSM, it offers online programs such as contemporary college experience. Its services also include mobile and other learning platform for students. The company was founded by Wayne Clugston and Andrew S. Clark in May 1999 and is headquartered in San Diego, CA.

Sunlands Technology Group Company Profile

Sunlands Technology Group provides on line post-secondary and professional education. The firm offers various degree-and diploma-oriented post-secondary courses through online platforms. It also provides online professional courses and educational content to help students prepare for professional certification exams and attain professional skills. The company was founded by Peng Ou and Tongbo Liu in August 2003 and is headquartered in Beijing, China.

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