Head to Head Comparison: Sunlands Technology Group (NYSE:STG) vs. Udemy (NASDAQ:UDMY)

Sunlands Technology Group (NYSE:STG) and Udemy (NASDAQ:UDMY) are both small-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Institutional and Insider Ownership

26.4% of Sunlands Technology Group shares are held by institutional investors. Comparatively, 79.5% of Udemy shares are held by institutional investors. 59.7% of Sunlands Technology Group shares are held by insiders. Comparatively, 3.2% of Udemy shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Sunlands Technology Group and Udemy”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sunlands Technology Group	$2.05 billion	0.04	$90.26 million	$4.49	1.20
Udemy	$786.57 million	1.72	-$85.29 million	($0.57)	-16.07

Sunlands Technology Group has higher revenue and earnings than Udemy. Udemy is trading at a lower price-to-earnings ratio than Sunlands Technology Group, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Sunlands Technology Group has a beta of 1.05, suggesting that its stock price is 5% more volatile than the S&P 500. Comparatively, Udemy has a beta of 1.76, suggesting that its stock price is 76% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Sunlands Technology Group and Udemy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sunlands Technology Group	0	0	0	0	0.00
Udemy	1	2	8	0	2.64

Udemy has a consensus target price of $10.95, indicating a potential upside of 19.59%. Given Udemy’s stronger consensus rating and higher possible upside, analysts clearly believe Udemy is more favorable than Sunlands Technology Group.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sunlands Technology Group	21.47%	103.50%	20.40%
Udemy	-10.84%	-27.93%	-10.14%

Summary

Sunlands Technology Group beats Udemy on 8 of the 14 factors compared between the two stocks.

About Sunlands Technology Group

Sunlands Technology Group, through its subsidiaries, provides online education services through online and mobile platforms in the People's Republic of China. It offers various degree- and diploma-oriented post-secondary courses, including preparation courses for the self-taught higher education examination (STE) for learners pursuing associate diplomas or bachelor's degrees, as well as for the entrance examinations of Master of Business Administration programs. The company's STE courses include Chinese language and literature, law, pre-school education, marketing, English, human resource management, business administration, business management, modern corporate governance, financial management, advertising, accounting, administrative management, computer information management, finance, chain operation management, and visual communication and design and production. It also provides professional certification preparation courses in various industries and professions, such as accounting, human resources, teaching, and finance. In addition, the company offers education services through online and mobile platforms to adult students, pursuing post-secondary, and professional educations. The company was formerly known as Sunlands Online Education Group and changed its name to Sunlands Technology Group in August 2018. Sunlands Technology Group was founded in 2003 and is headquartered in Beijing, the People's Republic of China.

About Udemy

Udemy, Inc., a learning company, that operates a marketplace platform for learning skills in the United States and internationally. The company offers skill acquisition, development, and validation courses for organizations and individuals, through direct-to-consumer or Udemy Business offerings in various languages. Its courses provide learning objectives, such as reskilling or upskilling in technology, business, soft skills, and personal development, as well as learners receive access to interactive learning tools comprising quizzes, exercises, and instructor questions-and-answers. The company was incorporated in 2010 and is headquartered in San Francisco, California.