Businesses and schools have finally started reopening in the United States but not everyone is inclined toward physically attending them given the surge in new coronavirus cases. In fact, a USA Today analysis of Johns Hopkins data showed that 16 states have set records for new cases in a week. Fears of coronavirus flaring up further may not be unwarranted as there is still no sign of a vaccine to treat the deadly virus. Moreover, parents too want schools to fast adapt to the online education module as that’s going to be the new normal.
This definitely is reason enough for people to once again stay indoors. Although most Americans expect schools to reopen in fall, there are chances that teachers and students may not be there. This made schools shift to online education to help students complete their semester this year.
Coronavirus Fears Growing
Although states have started reopening, fears too have come back haunting after a surge in fresh coronavirus cases. Of the 50 states, 41 are witnessing worse weeks than the previous one. And an analysis of COVID Tracking Project data shows that in 36 states, a higher rate of people is testing positive than in the week before.
According to a survey conducted by Morning Consult, 85% of parents of school-aged children in the United States agree that schools should be prepared and equipped to shift to an online learning environment in the event of future scenarios that lead to school closures. Another survey conducted by Morning Consult shows that 71% of U.S. parents agree that online education should be an ongoing option after the COVID-19 pandemic. Parents also show confidence in online learning as a viable academic option for their students.
A national survey commissioned by K12, Inc. (LRN - Free Report) and conducted through Qualtrics showed that 64% of parents agree that the quality of education their children would receive from an online school is equal to what they would receive in a traditional setting.
Online Education to Gain Traction
Schools across the world have started imparting classes online given that there are no immediate signs of coronavirus subsiding. In fact, countries that are reopening economies are witnessing a spike in fresh COVID-19 cases.
A report from UNESCO says more than 1 billion students globally have been prevented from attending schools, colleges and universities. Although most students are staying at home during this time, they can keep on learning with various video lectures, online seminars, animations, reading materials and even opt for online tests. This is where online education can be a game changer.
The online segment presently comprises a small fraction of the $2.2 trillion global higher education market — less than 2%, according to market intelligence firm HolonIQ — but the appetite from students for online offerings is likely to grow because of the coronavirus disruption. According to market research firm Technavio, the online education market is poised to grow by $247.46 billion during 2020-2024 at a CAGR of over 18% during the forecast period.
Stocks to Watch
With no timeline for a possible coronavirus vaccine, it is likely that parents, students as well as teachers are likely to prefer shifting to online education. Given this scenario, it would be prudent to keep a close watch on these four online education providers that are poised to grow.
Career Education Corporation (PRDO - Free Report) provides offers bachelor’s, associate and non-degree programs in information technologies, visual communication and design technologies.
The company’s expected earnings growth rate for the current year is 11%. The company’s shares have gained 3.5% in the past 30 days. Career Education carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Chegg Inc. (CHGG - Free Report) offers Chegg Services, comprising digital products and services such as Chegg Study, Chegg Writing and Chegg Tutors. These allow students to find human help on its learning platform through a network of live tutors.
The company’s expected earnings growth rate for the current year is 39.6%. The company’s shares have gained 26.5% over the past 30 days. Chegg has a Zacks Rank #3.
American Public Education, Inc. (APEI - Free Report) is an online provider of higher education, focused primarily on serving the military and public service communities.
The company’s expected earnings growth rate for the current year is 4.6%. American Publicshares have gained 9.5% over the past 30 days. The company has a Zacks Rank #3.
K12, Inc. a technology-based education company, is a leading national provider of proprietary curriculum and educational services created for online delivery to students in kindergarten through K-12.
The company’s expected earnings growth rate for next year is 90%. The Zacks Consensus Estimate for current-year earnings has improved 6.5% over the past 60 days. K12 has a Zacks Rank #3.
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