11 Best Education Stocks To Buy In 2024
In this article, we discuss 11 best education stocks to buy in 2024. If you want to skip our discussion on the education industry, head over to 5 Best Education Stocks To Buy In 2024.
In 2023, Generative AI took center stage, cautiously making its way into education with the full impact yet to be realized. The post-secondary education landscape is poised for new products and competitors, while international education is making a comeback with renewed vigor. The EdTech funding boom has subsided, bringing a return to foundational principles and a focus on outcomes. HolonIQ's analysis reveals 20 key shifts and over 50 trends across early childhood, K12, higher education, and workforce education. In the next decade, there will be a concentration on skills, with new methods assessing and cultivating essential future competencies. Technology will drive innovative learning models and experiences, while the gap between research and practice narrows, emphasizing evidence-based approaches. Holistic education, fostering both academic and personal growth, is essential for learner success.
In 2023, EdTech venture capital investment reached $3 billion, marking a 72% decrease from the previous year, according to HolonIQ. North America contributed half of the global EdTech funding, while both India and China experienced significantly reduced venture capital investments. India's Byju's, previously considered the world's largest EdTech company, faced challenges, impacting the entire Indian market. The ongoing impact of Chinese regulations persisted in 2023. Notably, the year witnessed no venture capital deals in education exceeding the $100 million mark. In terms of mergers and acquisitions, $7 billion was recorded across more than 421 transactions. At any given time, nearly 300 listed education companies hold a combined market capitalization of around $200 billion, with notable fluctuations in recent years. The industry saw approximately 20 small to medium-sized initial public offerings (IPOs) in 2023, with no major transactions. Four major take-privates commenced in 2023 as private equity found opportunities to reposition and rebuild or accelerate brands away from the public markets.
The Business Research Company expects the educational services market to increase from $3,438.38 billion in 2023 to $3,707 billion in 2024, exhibiting a compound annual growth rate (CAGR) of 7.8%. The market is projected to reach a value of $4,980.51 billion in 2028, indicating a CAGR of 7.7% over the forecast period of 2024-28. This growth is attributed to digital and remote learning, global collaborations, bridging skill gaps, population growth, and government subsidies for education.
In 2024, key education trends highlighted by Salesforce include a projected decline in US college and university enrollments due to changing demographics, prompting the need for long-term enrollment strategies. Institutions are turning to key enrollment indicators (KEI) to understand complex enrollment patterns. Personalizing engagement with prospective students is crucial for improving yield, while external demands for equity in accessibility and learning outcomes shape institutions' missions. Moreover, Generative AI is anticipated to revolutionize personalized education, enabling teachers to create content aligned with individual student interests and skill levels. The rise of specialized small language models (SLMs) will reduce the cost of scaling personalized learning. AI assistants will assist student advisors in managing caseloads and personalizing learning paths, identifying at-risk students. AI curriculum will also become mainstream in K-12 classrooms, necessitating acceptable use standards and policies. Schools will also need to manage risks associated with AI use by staff. The modernization of mission-critical systems, like student information systems (SIS), will focus on enhancing the student experience, integration, and interoperability. In light of these trends, the workforce landscape will witness a shift towards skilled credentials, with corporations and technology companies screening for applicants with industry-approved certifications.
To benefit from the upcoming wave of innovation in the education industry, some of the best stocks to buy include Stride, Inc. (NYSE:LRN), New Oriental Education & Technology Group Inc. (NYSE:EDU), and TAL Education Group (NYSE:TAL).
Our Methodology
We selected the best education based on overall hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 933 elite hedge funds tracked as of the end of the fourth quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).
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Best Education Stocks To Buy In 2024
11. Chegg, Inc. (NYSE:CHGG)
Number of Hedge Fund Holders: 21
Chegg, Inc. (NYSE:CHGG) operates a learning platform that helps students develop essential life and job skills through subscription services like Chegg Study, Chegg Writing, and Chegg Math. The platform offers personalized support from AI, computational engines, and subject matter experts. On February 5, Chegg, Inc. (NYSE:CHGG) reported a Q4 non-GAAP EPS of $0.36, in-line with market consensus. The revenue of $187.99 million outperformed Wall Street estimates by $2.02 million.
According to Insider Monkey’s fourth quarter database, 21 hedge funds were bullish on Chegg, Inc. (NYSE:CHGG), compared to 25 funds in the prior quarter. D E Shaw is a prominent stakeholder of the company, with 4.8 million shares worth $55 million.
In addition to Stride, Inc. (NYSE:LRN), New Oriental Education & Technology Group Inc. (NYSE:EDU), and TAL Education Group (NYSE:TAL), Chegg, Inc. (NYSE:CHGG) is one of the best education stocks to invest in.
Artisan Small Cap Fund made the following comment about Chegg, Inc. (NYSE:CHGG) in its second quarter 2023 investor letter:
“Along with Catalent, we ended our investment campaigns in Chegg, Inc. (NYSE:CHGG) and Option Health Care. Chegg is a digital education platform. Shares have been under pressure as the company has reported disappointing fundamental results. Our thesis centered on the belief that there were several tailwinds behind the company’s profit cycle—international expansion, opportunities to cross-sell existing users and longer term changes in higher education (e.g., more remote learning, more focus on student outcomes and pressure on tuition). However, we have been disappointed with the company’s execution and decided to exit the position.”
10. Perdoceo Education Corporation (NASDAQ:PRDO)
Number of Hedge Fund Holders: 21
Perdoceo Education Corporation (NASDAQ:PRDO) is a provider of postsecondary education in the United States, offering online, campus-based, and blended learning programs. It operates through two segments – Colorado Technical University and The American InterContinental University System. Perdoceo Education Corporation (NASDAQ:PRDO) is one of the best education stocks to invest in. On February 21, the company reported a Q4 non-GAAP EPS of $0.27 and a revenue of $147.92 million, exceeding Wall Street estimates by $0.04 and $1.72 million, respectively.
According to Insider Monkey’s fourth quarter database, 21 hedge funds were long Perdoceo Education Corporation (NASDAQ:PRDO), compared to 20 funds in the prior quarter.
9. Adtalem Global Education Inc. (NYSE:ATGE)
Number of Hedge Fund Holders: 22
Adtalem Global Education Inc. (NYSE:ATGE) is a global workforce solutions provider operating through three segments – Chamberlain, Walden, and Medical and Veterinary. The Chamberlain segment focuses on nursing and health professions education through Chamberlain University. The Walden segment offers online certificates and degrees in various fields, including nursing, education, business, psychology, and criminal justice, through Walden University. The Medical and Veterinary segment provides programs in the medical and veterinary education industry through institutions like American University of the Caribbean School of Medicine, Ross University School of Medicine, and Ross University School of Veterinary Medicine. Adtalem Global Education Inc. (NYSE:ATGE) is one of the top education stocks to monitor.
Adtalem Global Education Inc. (NYSE:ATGE) released its fiscal 2024 second quarter results on January 30, 2024. The company reported a non-GAAP EPS of $1.23 and a revenue of $393.2 million, outperforming Wall Street estimates by $0.08 and $13.78 million, respectively. The total student enrollment for the quarter was 81,772, up 6.2% year-over-year.
According to Insider monkey’s fourth quarter database, 22 hedge funds held stakes in Adtalem Global Education Inc. (NYSE:ATGE), compared to 19 funds in the prior quarter. John W. Rogers’ Ariel Investments is the largest stakeholder of the company, with 2.7 million shares worth $163.4 million.
Ariel Fund made the following comment about Adtalem Global Education Inc. (NYSE:ATGE) in its Q3 2023 investor letter:
“Shares of global leader in for-profit education, Adtalem Global Education Inc. (NYSE:ATGE), also advanced on a top- and bottom-line earnings beat and subsequent increase at the low-end of its FY2024 Adjusted EPS guidance. We remain encouraged by the continued recovery in nursing school programs, highlighted by Walden’s new student enrollment up double-digits versus last year. Although enrollment trends across the medical schools faced headwinds in the quarter, they appear temporary, with management having already implemented the necessary changes to convert strong underlying demand into students. Although investors remain skeptical of the near-term backdrop, we believe ATGE will benefit from the healthcare worker shortage in the U.S., evidenced by its market leadership as the number one grantor of nursing degrees in the U.S. and the largest producer of African-American MDs, PhDs and nurses in the country.”
8. Udemy, Inc. (NASDAQ:UDMY)
Number of Hedge Fund Holders: 22
Udemy, Inc. (NASDAQ:UDMY) operates a global marketplace platform for learning skills, offering technical, business, and personal development courses to individual learners and enterprises. The platform provides access to around 200,000 courses in approximately 75 languages, serving 59 million learners. Courses cover reskilling, upskilling in technology and business, and soft skills. On February 14, Udemy, Inc. (NASDAQ:UDMY) reported a Q4 non-GAAP EPS of $0.02 and a revenue of $189.5 million, outperforming Wall Street estimates by $0.04 and $3.45 million, respectively. Revenue for the quarter increased 14.6% year-over-year.
According to Insider Monkey’s fourth quarter database, 22 hedge funds were bullish on Udemy, Inc. (NASDAQ:UDMY), up from 12 funds in the prior quarter. Bruce Emery’s Greenvale Capital is the biggest stakeholder of the company, with 6.60 million shares worth $97.2 million.
7. Laureate Education, Inc. (NASDAQ:LAUR)
Number of Hedge Fund Holders: 24
Laureate Education, Inc. (NASDAQ:LAUR) operates a network of universities and higher education institutions, offering a variety of undergraduate and graduate degree programs in business, management, medicine, health sciences, engineering, and information technology. The programs are delivered through campus-based, online, and hybrid formats. On February 22, Laureate Education, Inc. (NASDAQ:LAUR) announced a Q4 GAAP EPS of $0.26, missing estimates by $0.09. Revenue for the quarter increased 18.2% year-over-year to $409.4 million, beating market consensus by $21.6 million. Laureate Education, Inc. (NASDAQ:LAUR) is one of the best education stocks to buy.
According to Insider Monkey’s fourth quarter database, 24 hedge funds were bullish on Laureate Education, Inc. (NASDAQ:LAUR), compared to 21 funds in the last quarter. Arnaud Ajdler’s Engine Capital is the leading stakeholder of the company, with 2.82 million shares worth $38.70 million.
Here is what Clark Street Value has to say about Laureate Education, Inc. (NASDAQ:LAUR) in its Q4 2021 investor letter:
“Another informal liquidation, Laureate Education (LAUR), has mostly worked out to plan, the sale of Walden University closed and they’ve since paid out $7.59/share in special dividends. They’ve also collapsed the dual share structure. It is now a purer play on Mexico and Peru, my best guess is this is not the end state and we’ll see a final sale of the remaining assets once covid subsides and/or the political climate in Latin America improves. Most of my exposure rolled off earlier in December when my calls expired, now just hanging onto a smallish position to see how the rest plays out.”
6. Coursera, Inc. (NYSE:COUR)
Number of Hedge Fund Holders: 25
Coursera, Inc. (NYSE:COUR) is an online educational content platform operating globally, providing guided projects, courses, specializations, online degrees, and certificates. The company operates in three segments – Consumer, Enterprise, and Degrees. Coursera serves individuals, enterprises, businesses, campuses, and governments. On February 1, Coursera, Inc. (NYSE:COUR) reported a Q4 non-GAAP EPS of $0.06 and a revenue of $168.88 million, exceeding Wall Street estimates by $0.06 and $4.11 million, respectively. Revenue for the quarter rose 18.8% on a year-over-year basis.
According to Insider Monkey’s fourth quarter database, 25 hedge funds were long Coursera, Inc. (NYSE:COUR), compared to 23 funds in the earlier quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is the largest stakeholder of the company, with 2 million shares worth $38.7 million.
Like Stride, Inc. (NYSE:LRN), New Oriental Education & Technology Group Inc. (NYSE:EDU), and TAL Education Group (NYSE:TAL), Coursera, Inc. (NYSE:COUR) is one of the best education stocks to consider. It ranks 6th on our list.
Here is what ClearBridge SMID Cap Growth Strategy has to say about Coursera, Inc. (NYSE:COUR) in its Q3 2021 investor letter:
“We also added two positions in the IPO aftermarket, (one is) online education portal Coursera. Coursera, which makes academic courses from some of the world’s leading universities available through its platform and offers online degree programs, saw its shares trade lower following its March IPO but has seen significant uptake for its services since the onset of COVID.”
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Disclosure: None. 11 Best Education Stocks To Buy In 2024 is originally published on Insider Monkey.
