Forget Meten Holding Group, Buy These 3 Education & Training Stocks

The global education and training services market shows impressive growth prospects, and the United States is expected to remain one of the frontrunners in this space. The recent rally of education and training stock Meten Holding (METX) does not look sustainable given its weak fundamentals. However, Adtalem Global Education (NYSE:), Universal Technical Institute (NYSE:), and Lincoln Educational Services (LINC) look well-positioned to capitalize on the industry tailwinds and perform better than METX.The pandemic has led to a significant shift in the formal education structure, switching to online modes from traditional classroom learning. In the United States, post-secondary degree attainment stood at 52% at the end of 2020, much higher than the OECD average of 45%. Furthermore, the global education and training services market is expected to grow at an annualized rate of 9% starting this year, to reach $4.20 trillion by 2023.

Over the past month, Chinese Omnichannel English Language Training (ELT) service provider Meten Holding Group Ltd. (METX) has rallied 109.7%, after its strategic cooperation agreement with AGM Group Holdings Inc. (AGMH), for developing METX’s crypto mining business. However, the gains may be hard to sustain, given METX’s weak fundamentals. For the fiscal second quarter ended June 30, adjusted net loss came in at $11.73 million, while loss from operations stood at $12.01 million. Selling and marketing expenses increased 8.9% year-over-year to $11.95 million. Furthermore, Street expects its EPS to be negative $0.39 for the next year (fiscal 2022).

So, it could be wise to bet on education and training stocks Adtalem Global Education Inc. (ATGE), Universal Technical Institute, Inc. (UTI), and Lincoln Educational Services Corporation (LINC), which are better positioned to cash in on the industry’s growth and outperform METX.

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