REDU stock: buy or sell?

REDU stock price: $7.25 -1.23% At close on October 18th, 2019

Updated on:
October 18th, 2019

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RISE Education Cayman depreciated an unpleasant -1.23% and closed at $7.25. On Oct 11th REDU skyrocketed a dazzling 5.46%. On Monday REDU plummed a bloodcurdling -5.20%.

RISE Education Cayman Ltd, through its subsidiaries, provides junior English language training services under the RISE brand name in the People's Republic of China.

Should I buy REDU stock?

Make a decision about when to buy or sell stocks is one of the hardest parts of being a trader or investor. Having a trading plan helps to make decisions easier, quicker and with less hesitations. There are thousands of trading strategies for you to choose, but at Stocks2.com we prefer those that are simple but successful.

Currently, RISE Education Cayman stock doesn't match any of these trading strategies, so our recommendation is not to buy.

Buy setupElegible
New all-time highNo
New 52 week highNo
Price crossing up 200d MANo
100d MA crossing up 200d MANo
This is not a selling recommendation at all, just it's not the best moment to buy if you follow any of these trading strategies.

Is RISE Education Cayman stock a buy?

Banks and financial institutions post stock ratings everyday. At Stocks2.com, we gathered 2 ratings published for REDU stock in the last month.

Is REDU a good stock to buy?
DateAnalyst / BrokerPrevious ratingCurrent rating
2019-8-19Morgan StanleyEqual WeightUnderweight
2019-3-25Morgan StanleyOverweightEqual Weight

REDU stock analysis

Daily outlook

RISE Education Cayman shares depreciated -1.23% to $7.25 on Oct 18th.

RISE Education Cayman shares depreciated -1.23% to $7.25 on October 18th.

REDU stock chart (daily)

Weekly outlook

RISE Education Cayman shares plummed -5.72% this week, ending at $7.25. Early September REDU boosted an amazing 8.83% in just one week. Counting this, it's been 3 red weeks in a row, sliding $-1.69 or a -19.20%.

Since price and 40-weeks moving average lines crossed down early July, REDU fell $-2.41 per share (-24.95%). Trading stocks that are under the 40-weeks (that is, 200-days) moving average line is not recommended by many experts, as it indicates that the stock has not enough institutional support.

REDU stock chart (weekly)

REDU stock price history

REDU IPO was on October 20th, 2017 at $16.05 per share1. Since then, REDU stock declined a -54.80%, with a yearly average of -27.40%.

1: Adjusted price after possible price splits or reverse-splits.

REDU stock historical price chart

REDU stock reached 52-week highs on November at $12.00, and all-time highs 2018-03-13 with a price of 18.6.

REDU stock price target

Predicting the price evolution of a stock or any financial instrument in a reliable and repeatable way is probably impossible. However, banks and other financial institutions analysts, with the help of lots of data and algorithms do their best to predict the stock prices movement. We do not recommend to follow these stock price predictions without a critical thinking from your side, as their accuracy is usually low. For the last 30 days we have not found any price target for RISE Education Cayman stock by any trusted analyst.

Financials and fundamental analysis

Earnings date and Earnings per Share

On March, RISE Education Cayman missed the forecasts of the analysts and reported a scary EPS of $0.09 per share when experts were expecting $0.12.
REDU earnings date and EPS evolution
QuarterReporting dateEstimated EPSActual EPSSurprise
2017-Q1-n/a0.26n/a
2017-Q2-n/a0.29n/a
2017-Q3-n/an/an/a
2017-Q42018-03-15n/a-0.19n/a
2018-Q12018-05-100.110.1-9.1%
2018-Q22018-08-160.110.110.0%
2018-Q32018-11-150.110.08-27.3%
2018-Q42019-03-140.120.09-25.0%
2019-Q1-n/an/an/a
2019-Q2-n/an/an/a

Annual financial results

Compared to 2017, last anual turnover report draw a super good gain of 31.22% to $1,271.89 million dollars. When comparing 2018 vs 2017, similarly, profit margin (that is, the net income divided by revenues) skyrocketed a 16.19% to 11.24%.

REDU annual Sales and Income evolution
YearSalesYoYIncome/(margin)YoY
2014$407 M-$-65.17 M-16.0%-
2015$529 M30.19%$-26.29 M-5.0%-59.67%
2016$711 M34.28%$54 M7.6%-305.15%
2017$969 M36.33%$-47.97 M-4.9%-188.97%
2018$1,272 M31.22%$143 M11.2%-397.99%

Quarterly financial results

RISE Education Cayman posted $354.17 M in revenues for 2018-Q4, a 1.95% up compared to previous quarter. Reported quarter earnings marked $31.51 M with a profit margin of 8.90%. Profit margin remained stable a -0.57% compared to previous quarter when profit margin was 9.47%. When comparing turnover to same quarter last year, RISE Education Cayman sales marked an exceptional gain and rocketed a 30.13%. Looking back to recent quarterly results, RISE Education Cayman posted 3 positive quarters in a row.
REDU quarterly Sales and Income evolution
QuarterSales1QoQ2Income1/(margin)QoQ2
2017-Q1$31 M-$4 M13.4%-
2017-Q2$33 M8.57%$5 M14.0%13.38%
2017-Q3$39 M17.74%$4 M11.5%-3.46%
2017-Q4$272 M596.42%$-138 M-50.7%-3,167.31%
2018-Q1$270 M-0.75%$36 M13.3%-125.96%
2018-Q2$300 M11.13%$43 M14.2%19.32%
2018-Q3$347 M15.72%$33 M9.5%-23.05%
2018-Q4$354 M1.95%$32 M8.9%-4.21%

RISE Education Cayman ownership

When you are planning to buy shares of a company, it's worth to overview its ownership structure.

RISE Education Cayman shares owned by insiders (that is, founders, CEO, CTO, main executives or other management staff) currently counts a 10.66% of all shares.

In case of RISE Education Cayman stock, 77.64% of its shares are held by institutions (mutual funds, pension funds, big banks and other large financial institutions). Bearish positions for REDU stock account 0.00%, no big difference from last month.

The following table compares ownership indicators for other stocks related to RISE Education Cayman:

REDUGHCHMHCLRN
Market cap$412.5 M$2.8 B$727.3 M$996.2 M
Total shares56.9 M4.4 M124.3 M40.3 M
Float shares14.3 M4.1 M97.2 M36.9 M
  - Institutional holdings (%)77.6%86.5%95.2%85.6%
  - Insider holdings (%)10.7%3.9%0.6%6.6%
Shares in short selling0.0%0.0%0.0%0.0%

REDU summary

Friday, October 18th, 2019
Open$7.45
Close$7.25
Day range$7.20 - $8.05
Previous close$7.34
Session gain-1.23%
Average true range$0.73
50d mov avg$8.01
100d mov avg$8.52
200d mov avg$9.10
Daily patternlt11a
Weekly pattern lb06a

RISE Education Cayman performance

Stocks performance is always measured in comparision to the market or competitors and related stocks in the same industry. We compared RISE Education Cayman against Graham, Houghton Mifflin Harcourt and K12 in the following table:
Stock3m6m12m
REDURISE Education Ca...-19.53%-29.47%-31.99%
GHCGraham-11.65%-8.84%13.95%
HMHCHoughton Mifflin ...5.60%-22.31%-14.35%
LRNK12-18.05%-30.12%44.57%

RISE Education Cayman competitors

One check before investing in any stock is to have a look a list of its competitors, in this case for RISE Education Cayman. We selected 3 companies as RISE Education Cayman competitors as they are in the same industry or have similar market objectives.