What is December outlook for Four Seasons (USA Stocks:FEDU)?

The proof of the pudding is in the eating, and for Four Seasons Education, a company listed on the NYSE and operating in the Education & Training Services industry, the taste might be a bit sour for private investors. As we approach December, there is a growing buzz around a potential sell-off of the company's stock. With a valuation hype value of 9.49, significantly higher than its valuation real value of 7.76, the stock appears overpriced. Furthermore, the company's naive expected forecast value of 10.52 suggests a possible downside price of 7.27, which could be a red flag for investors. As the fiscal year end in February approaches, it seems that the market might be preparing for a correction. Generally, our focus is on analyzing the price patterns of Four Seasons Education (USA Stocks: FEDU) and their correlations with various microeconomic environments and drivers. We also utilize predictive analytics to construct daily price indicators for Four Seasons Education and compare them against related drivers. A recent surge in volatility has left many private investors perplexed. In this article, we will review Four Seasons Education. We will explore why investors in Four Seasons may still consider maintaining their stake in the business.
Published over two weeks ago
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Reviewed by Michael Smolkin

We offer trading advice that aligns with the prevailing expert consensus on Four Seasons Education. Our sophisticated recommendation engine employs a multidimensional algorithm to assess the company's growth potential, utilizing all available technical and fundamental data at the time. The company's Profit Margin (PM) is -0.87% , which may indicate that it is not effectively implementing its current pricing strategies or it is unable to manage all of its operational costs. This is significantly below average. Similarly, it has an Operating Margin (OM) of -1.04% , suggesting that for every $100 in sales, it incurs a net operating loss of $1.04.

Main Ideas

The Four Seasons Education stock has been on a roller coaster ride, with a high price of $10.24 and a low of $9.4. Despite the stock's maximum drawdown of 15.94%, the potential upside of 6.32% could attract private investors looking for a quick sell-off in December. However, the stock's market risk-adjusted performance of -0.12 and a negative Treynor Ratio of -0.13 indicate a higher risk-return trade-off. The company's fiscal year ends in February, which could also influence investor decisions.
The successful prediction of Four Seasons stock price could yield a significant profit to investors. But is it possible? The efficient-market hypothesis suggests that all published stock prices of traded companies, such as Four Seasons Education, already reflect all publicly available information. This academic statement is a fundamental principle of many financial and investing theories used today. However, the typical investor usually disagrees with a 'textbook' version of this hypothesis and continually tries to find mispriced stocks to increase returns. We use internally-developed statistical techniques to arrive at the intrinsic value of Four Seasons based on Four Seasons hews, social hype, general headline patterns, and widely used predictive technical indicators. We also calculate exposure to Four Seasons's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Four Seasons's related companies.

Use Technical Analysis to project Four expected Price

Four Seasons technical stock analysis exercises models and trading practices based on price and volume transformations, such as the moving averages, relative strength index, regressions, price and return correlations, business cycles, stock market cycles, or different charting patterns.
A focus of Four Seasons technical analysis is to determine if market prices reflect all relevant information impacting that market. A technical analyst looks at the history of Four Seasons trading pattern rather than external drivers such as economic, fundamental, or social events. It is believed that price action tends to repeat itself due to investors' collective, patterned behavior. Hence technical analysis focuses on identifiable price trends and conditions. More Info...

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 reported the previous year's revenue of 34.22 M. Net Loss for the year was (33.49 M) with profit before overhead, payroll, taxes, and interest of 14.29 M.
 2020 2021 2022 2023 (projected)
Revenues USD43.1M39.7M5.0M10.2M

Deferred Revenue Breakdown

Four Seasons Deferred Revenue yearly trend continues to be comparatively stable with very little volatility. Deferred Revenue is likely to outpace its year average in 2023. Deferred Revenue usually refers to a component of Total Liabilities representing the carrying amount of consideration received or receivable on potential earnings that were not recognized as revenue; including sales; license fees; and royalties; but excluding interest income. Where this item is not contained on the company consolidated financial statements and cannot otherwise be imputed the value of 0 is used. At this time, Four Seasons' Deferred Revenue is comparatively stable as compared to the past year.
201084.84 Million
201790.1 Million
201887.87 Million
201971.95 Million
202075.24 Million
20216.49 Million
20227.27 Million
202323.88 Million
"As the saying goes, 'buy low, sell high', but the question for private investors is whether Four Seasons Education stock is set to be a sell-off candidate in December. With a Jensen Alpha of -0.1 and a Treynor Ratio of -0.13, the stock's performance has been less than stellar. However, the company's strong financial position, with a working capital of 423.81M and cash and equivalents of 508.43M, may make it an attractive proposition for investors looking for undervalued stocks. The company's Price to Book ratio of 0.26X and Price to Earnings ratio of 20.88X further suggest that the stock is undervalued. However, with a high probability of bankruptcy at 23.69% and a negative return on equity of 0.07, investors should tread carefully. The potential upside of 6.32 and a target price of 4.37 may be enticing, but the risk factors cannot be ignored. Ultimately, whether Four Seasons Education stock will attract private investors for a potential sell-off in December will depend on their risk tolerance and investment strategy."

Does Four Seasons have cash to continue?

The recent decline in the kurtosis of Four Seasons Education stock to 1.49 indicates a decrease in volatility and a more normalized distribution of returns, which could suggest a more stable investment environment. However, this diminished volatility does not necessarily equate to financial health for the company. In response to the question, "Does Four Seasons have enough cash to continue?", investors should not solely depend on statistical measures. Instead, they should also closely examine the company's balance sheet, cash flow statement, and other financial indicators to evaluate its liquidity and long-term viability. Four Seasons Education displays extremely low volatility with a skewness of -0.32 and a kurtosis of 1.49. Nevertheless, we recommend investors to further investigate Four Seasons Education's technical indicators to ensure that all market information is available and reliable. Understanding different market volatility trends often assists investors in timing the market. Correct use of volatility indicators allows traders to measure the risk of Four Seasons' stock against market volatility during both bullish and bearish trends. The heightened level of volatility that accompanies bear markets can directly affect Four Seasons' stock price, adding stress to investors as they watch the value of their shares plummet. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices drop.

The Current Takeaway on Four Seasons Investment

Whereas some firms in the education & training services industry are either recovering or due for a correction, Four Seasons may not be performing as strong as the other in terms of long-term growth potentials. With a less-than optimistic outlook for your 90 days horizon, it may be a good time to exit some or all of your Four Seasons holdings as it seems the potential growth was already fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Four Seasons.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Four Seasons Education. Please refer to our Terms of Use for any information regarding our disclosure principles.

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