Analyzing ATA (NASDAQ:AACG) and Strategic Education (NASDAQ:STRA)

ATA (NASDAQ:AACG) and Strategic Education (NASDAQ:STRA) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings and price targets for ATA and Strategic Education, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ATA	1	0	0	0	1.00
Strategic Education	0	3	2	0	2.40

Strategic Education has a consensus price target of $96.67, suggesting a potential upside of 30.56%. Given Strategic Education’s stronger consensus rating and higher possible upside, analysts plainly believe Strategic Education is more favorable than ATA.

Insider and Institutional Ownership

0.7% of ATA shares are owned by institutional investors. Comparatively, 93.3% of Strategic Education shares are owned by institutional investors. 52.9% of ATA shares are owned by insiders. Comparatively, 3.6% of Strategic Education shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares ATA and Strategic Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ATA	N/A	N/A	N/A
Strategic Education	10.46%	8.98%	7.11%

Earnings & Valuation

This table compares ATA and Strategic Education”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ATA	$38.34 million	0.55	-$6.87 million	($0.20)	-3.10
Strategic Education	$1.27 billion	1.30	$126.61 million	$6.00	12.34

Strategic Education has higher revenue and earnings than ATA. ATA is trading at a lower price-to-earnings ratio than Strategic Education, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

ATA has a beta of 1.18, indicating that its share price is 18% more volatile than the S&P 500. Comparatively, Strategic Education has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.

Summary

Strategic Education beats ATA on 12 of the 14 factors compared between the two stocks.

About ATA

ATA Creativity Global, together with its subsidiaries, provides educational services to individual students through its training center network in China and internationally. Its educational services include portfolio training, research-based learning, overseas study counselling, in-school art classes through cooperation with high schools and training organizations, foreign language training services, junior art education, and other related educational services to its students. The company also offers online courses for students. It provides its services through partnership with sales channels, internet and mobile advertisement, word of mouth referral, and marketing events and activities. The company was formerly known as ATA Inc. and changed its name to ATA Creativity Global in September 2019. ATA Creativity Global was founded in 1999 and is headquartered in Hefei, China.

About Strategic Education

Strategic Education, Inc., through its subsidiaries, provides education services through campus-based and online post-secondary education, and programs to develop job-ready skills. The company operates through U.S. Higher Education, Australia/New Zealand, and Education Technology Services segments. It operates Strayer University that offers undergraduate and graduate degree programs in business, criminal justice, education, health services, information technology, and public administration at physical campuses located in the eastern United States, as well as through online; non-degree web and mobile application development courses through Hackbright Academy and Devmountain; and MBA online through its Jack Welch Management Institute. In addition, the company operates Capella University that provides post-secondary education; Torrens University, which offers undergraduate, graduate, higher degree by research, and specialized degree courses primarily in business, design and creative technology, health, hospitality, and education fields through online and on physical campuses located in Australia; Think Education, a vocational training organization; and Media Design School, which provides industry-endorsed courses in 3D animation and visual effects, game art and programming, graphic and motion design, digital media artificial intelligence, and creative advertising in New Zealand. It also offers Workforce Edge, a platform to employers that provides education benefits administration solutions; and Sophia Learning, which enables lower cost education benefits programs. Strategic Education, Inc. was founded in 1892 and is headquartered in Herndon, Virginia.