Sunlands Technology Group American Depositary Shares representing Class A ordinary shares (STG)

FairStock Score: 95/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look first at business quality, then price. Sunlands provides adult online education in China, a competitive field. In the second quarter of 2026, revenue was $406.4M and net income was $83.5M, a 20.54% net margin. That is real profitability, and FairStock calculates return on equity of 34.88%, return on capital employed of 12.86%, and debt-to-equity of only 0.12. The supplied figures show revenue growth of 6.47% and profit growth of 40.48%, so margins improved sharply. But I see little evidence of a durable competitive moat; the industry has many players and little switching cost. Financial health gives me pause. The Piotroski F-Score is 4/9, and the Altman Z-Score is -0.34, which points to financial fragility rather than safety. The stock closed at $2.62 on 2026-10-13, giving a FairStock P/E of 0.73 and P/B of 0.21. The Graham Number is $116.70, implying a 97.75% margin of safety, and PEG is 0.02. EV/EBITDA is negative at -0.83. These are extraordinary discounts, but extraordinary discounts often exist for a reason. With a market cap of only $47.5M, beta of 1.54, and no dividend, the market is pricing high uncertainty. FairStock also cannot assign a Lynch category because only 0 years of filed results are available where 3 are needed. My conclusion: the numbers are cheap and profitable, but the balance-sheet and track-record signals stop me from calling this a high-quality bargain.

In plain English: Sunlands Technology Group sells online courses to adults in China, including interest classes, job skills, and certificate or degree preparation. The business is profitable and earns a high return on shareholders' money, but its financial safety measure is weak. At the 2026-10-13 close of $2.62, the price looks very cheap compared with the company's profits and accounting value, though the stock is risky and has been volatile.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer