|By Vlad Skutelnik|
Four Seasons Education (FEDU), a prominent player in the Education Services sector, has been under the financial microscope since its IPO on the 8th of November 2017. Despite a Wall Street target price of $4.37, the company's current valuation market value stands at $9.4, suggesting a potential undervaluation. As of the 19th of November 2023, the naive expected forecast value for FEDU is $10.52, indicating a promising upside. However, investors should note the company's short ratio of 6.58 and the fact that shares short have increased from 1.5K to 2.3K over the past month. Despite the strong sell consensus among analysts, the possible upside price of $13.84 suggests that Four Seasons Education may present a lucrative investment opportunity in December. At present, the Sales per Share of Four Seasons Education is relatively stable compared to the previous year. The Total Debt is projected to increase to approximately $3.8 million in 2023, while the Enterprise Value is expected to decrease to $23.9 million in the same year. This perspective is based on forecasting the future value of Four Seasons using technical analysis. So, what should private investors in Four Seasons anticipate in December?
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Reviewed by Gabriel Shpitalnik
Four Seasons Education (FEDU) stock has demonstrated a considerable level of volatility, as indicated by a standard deviation of 3.43 and a variance of 11.74. Despite a recent price change resulting in a loss of 0.88 and a price percent change of -8.56%, the company's stock still hovers near its 52-week high of $11.82. Although the short ratio of 6.58 suggests some investor skepticism, the increase in shares short from 1.5K to 2.3K over the past month indicates growing interest. Despite the negative total risk alpha of -0.15 and Jensen alpha of -0.1, the company's position in the Education & Training Services industry could present potential growth opportunities in December.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Four Seasons. Your research has to be compared to or analyzed against Four Seasons' peers to derive any actionable benefits. When done correctly, Four Seasons' competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in Four Seasons Education.
Main IdeasFour Seasons Education boasts a beta of 0.6578. This suggests that as market returns increase, returns on owning Four Seasons are projected to decrease, but at a significantly lower rate. During a bear market, Four Seasons is likely to outperform the market. The beta indicator assists investors in understanding whether Four Seasons' movements align with the rest of the market, and how volatile (i.e., risky) it is in comparison to the market (i.e., selected benchmark). In simpler terms, if Four Seasons deviates minimally from the market, it does not contribute much risk to the portfolio, but it also doesn't significantly enhance the expected returns.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Four Seasons Education. Regardless of method or technology, to accurately forecast the stock or bond market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.
Predictive Modules for Four Seasons
Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Four Seasons' price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Four Seasons in the context of predictive analytics.
How important is Four Seasons's Liquidity
Four Seasons financial leverage refers to using borrowed capital as a funding source to finance Four Seasons Education ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Four Seasons financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to Four Seasons' owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of Four Seasons' financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between Four Seasons's total debt and its cash.
Four Seasons Gross Profit
Four Seasons Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Four Seasons previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Four Seasons Gross Profit growth over the last 10 years. Please check Four Seasons' gross profit and other fundamental indicators for more details.
Is Four Seasons valued wisely by the market?
Four Seasons Education exhibits very low volatility with skewness of -0.32 and kurtosis of 1.49. However, we advise investors to further study Four Seasons Education technical indicators to ensure that all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Four Seasons' stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Four Seasons' stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
"As the saying goes, 'buy low, sell high', and Four Seasons Education (USA Stocks: FEDU) seems to be a promising investment opportunity this December. With a market capitalization of $19.92M and a robust current asset base of $263.18M, the company's financial health appears strong. The company's Price to Earnings ratio stands at 20.88X, indicating a reasonable valuation compared to its earnings. Despite a probability of bankruptcy at 23.69%, the company's substantial cash and equivalents of $508.43M and a healthy current ratio of 5.62X provide a safety net. The company's shares are currently undervalued with a Price to Book ratio of 0.26X, suggesting potential upside. However, investors should be aware of the company's negative return on assets and equity, indicating a need for improved efficiency. Overall, Four Seasons Education presents a promising investment opportunity with potential for growth in December." .