Sunlands Technology Group (STG)
Valuation Overview•Is Sunlands Technology Group Overvalued or Undervalued?
The market is pricing the stock in line with historical averages, assuming steady-state growth.
High-quality fundamentals with a strong composite quality score of 79/100, backed by robust profitability and solvency.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Solid fundamental quality, though growth presents a headwind.
Wall Street sentiment is generally neutral. However, capital return yields remain modest, driven predominantly by aggressive share repurchases.
Returns capital exclusively via buybacks — no active dividend
STG exhibits elite business quality, driven by exceptional capital efficiency and highly lucrative margins (highlighted by a massive 84.8% ROIC). This is backed by a fortress balance sheet, holding significant net cash ($438M) and minimal debt risk.
The company is facing top-line contraction (-4.6% 3Y CAGR) however, earnings have severely contracted over the same period. The company maintains healthy operational efficiency with a 22.0% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $470.2M | +1.5% | -4.6% | -1.7% | +28.9% | |
| EBITDA | $50.2M | — | -10.7% | — | — | |
| Net Income | $38.4M | +6.9% | -17.2% | — | — | |
| EPS (Diluted) | $2.80 | +5.5% | -17.5% | — | — | |
| Free Cash Flow | $142.6M | -26.9% | +52.2% | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 86.9% | 86.2% | 85.7% | 84.2% |
| Operating Margin | 22.0% | 21.2% | 18.9% | -16.5% |
| Net Margin | 18.1% | 21.7% | 20.3% | -13.8% |
| FCF Margin | 7.1% | 7.7% | 1.9% | 1.8% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | — | $0.83 | — | ||
| Q1'26 | $-1.18 | $0.41 | +134.7% | ||
| Q4'25 | — | $1.31 | — | ||
| Q3'25 | — | $1.31 | — | ||
| Q2'25 | — | $0.77 | — | ||
| Q1'25 | — | $0.59 | — | ||
| Q4'24 | — | $0.93 | — | ||
| Q3'24 | — | $0.83 | — |
Total return is -37.9% (1Y), lagging the benchmark by -62.9%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -42.4% | -51.7% | — |
| 1Y | -37.9% | -62.9% | — |
| 3YCAGR | -1.1% | -28.8% | — |
| 5YCAGR | -19.5% | -35.1% | +5.3% |
| 10YCAGR | -29.8% | -44.9% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about STG (STG) valuation, health, and returns.
STG valuation is being assessed using available models.
Valuation anchors are currently not available.
STG displays good financial health with a composite quality score of 79/100, supported by a Altman Z-Score of 0.6 (distress zone), Piotroski F-Score of 8/9, Return on Invested Capital (ROIC) of 84.8%.
STG returns capital via buybacks instead of dividends, carrying a 1.9% buyback yield and reducing outstanding shares by -1.3% in the last 12 months.
STG's current growth trajectory is Accelerating. The company achieved +1.5% 1Y revenue growth and +5.5% 1Y EPS growth, compared to its 3Y revenue CAGR of -4.6%.
Wall Street consensus is Hold based on 0 analysts, beating EPS expectations in 44% of recent quarters with a 3-quarter streak. The consensus price target represents a N/A change from current levels.
Investment risks for STG include: -81.5% 1-year max drawdown, elevated distress risk. Volatility risk is characterized by a beta of 0.83x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.