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Fund Manager Summary on Idp Education Ltd (ASX:IEL)
In March 2026, Pendal Group commented that Idp Education Ltd (ASX:IEL)'s 1H26 result was well received, with EBIT about 20% ahead on a restated basis, the transformation program on track, testing revenue supported by an 8% fee increase despite a 27% decline in India testing volumes, student placements down about 25% but yields up c.15% and FY26 guidance modestly upgraded amid continued global policy uncertainty. Across fund managers the consensus is that IEL is confronting significant near-term headwinds from tighter visa regimes and weaker international student flows that have driven sharp volume and earnings declines, with several managers flagging deteriorating earnings quality, poor cash flow conversion, growing contract assets and earlier balance sheet concerns that prompted exits, while other investors have taken contrarian or opportunistic positions after the sell-off noting IDP's market leadership in student placements and IELTS, long‑term structural tailwinds in international education, pricing power, and the potential upside from a material cost‑out program expected to annualise into FY27; valuation commentary ranged from “oversold/attractive” to cautious given policy risk. Key actionable insights are to prioritise monitoring policy and visa application trends in Australia, the UK and Canada, IELTS test bookings (especially India), management’s delivery of cost‑out and working capital improvements, and cash conversion metrics, since recovery depends on both policy normalisation and execution of structural cost reductions, while primary risks remain prolonged regulatory tightening, slower-than-expected volume recovery and any further balance sheet pressure.
Commentary From The Managers
There are 40 insights from 15 fund managers regarding their investment in Idp Education Ltd (ASX:IEL) available on Thesis Tracker.
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Commentary From The Managers
Pendal Group
2 Mar 2026
$4.47
Summary
- Pendal Group believes IDP Education remains an attractive holding and continues to hold because 1H26 delivered a ~20% restated EBIT beat, the transformation program is on track and the stock trades at c.14x FY27 PE.
- EBIT beat (~20% restated) demonstrates costs and transformation levers are translating to profit upside.
- Transformation program progress supports confidence in margin recovery and strong operating leverage.
- English testing improved via an 8% fee increase that kept revenue roughly flat versus the PCP despite continued weak volumes, notably -27% in India.
- Student placement (SP) volumes were weaker (down -25% vs PCP) and slightly below consensus, but yields rose ~15% in constant currency, aided by a one‑off working capital improvement.
- Management upgraded FY26 EBIT guidance by about 4% following the strong first half, while cautioning that global policy settings remain challenging.
- Consensus moved +5% for FY26 EBIT and -5% for FY27 EBIT, reflecting near‑term upgrades but longer‑term policy uncertainty weighing on volumes.
- Valuation looks compelling at c.14x FY27 PE, implying meaningful upside from modest volume recovery given operating leverage.
- Main risk is elevated policy uncertainty, which obscures the timing and trajectory of the volume recovery despite positive margin and valuation dynamics.
Elston Asset Management
31 Dec 2025
$5.78
Summary
- Elston Asset Management believes the long-term structural thesis for Idp Education Ltd remains intact and continues to hold because student demand persists, IEL is the leading placements provider, and recovery in volumes combined with higher revenue per student supports medium‑term earnings potential.
- Elston Asset Management sold out in June 2021 after IEL moved into the Top 100 index.
- IEL has returned to the small cap universe following the fallout from concurrent Government policy changes across its key destination markets.
- After reassessing the business, Elston Asset Management believes the structural nature of the industry remains intact and that the company retains its competitive position.
- Elston Asset Management notes student volumes contracted from peak levels in FY24, but expects volumes to be above pre‑COVID levels by FY26.
- Elston Asset Management highlights that IEL is now generating much higher revenue per student, partially offsetting the volume decline.
- Elston Asset Management expects positive volume growth will return as long as there is ongoing stability in Government policy.
Clime Investment Management
31 Oct 2025
$5.61
Summary
- IEL underperformed in October due to cautious investor sentiment stemming from ongoing challenges in key international student markets.
- Regulatory changes are impacting the international student market.
- IEL reaffirmed its FY26 EBIT guidance at its AGM, indicating confidence in its financial outlook.
- The company expects to outperform the broader industry, reinforcing its market-leading position.
- While the guidance is contingent on no further changes in industry conditions, Clime Investment Management sees IEL as well-positioned for future growth.
- Anticipation of a stabilizing international policy environment could benefit IEL's growth prospects.
ECP Asset Management
31 Oct 2025
$5.61
Summary
- IDP Education (IEL) underperformed in October following its AGM.
- Guidance for FY26 remained unchanged, raising investor concerns.
- Investors are questioning whether a recent increase in IELTS web traffic reflects a genuine recovery in student sentiment.
- ECP Asset Management believes it is still too early to forecast a recovery.
- IDP's ongoing cost-out program is expected to yield material margin improvements from the cyclical low point in FY25.
- Higher incremental margins are anticipated in the long term as volumes recover.
Pendal Group
27 Oct 2025
$5.61
Summary
- Pendal Group continues to monitor IDP Education's performance closely.
- IDP Education (IEL) experienced a decline of 10.3% in stock value.
- At the AGM, IDP reiterated its FY26 guidance.
- The company faced a second strike following a challenging year.
- The CFO reported progress on the transformation program.
- It is still considered too early to confirm a recovery in English testing volumes.
- Despite some positive web traffic trends, the stock gave up gains following these updates.
Seneca Financial Solutions
17 Oct 2025
$6.51
Summary
- Seneca Financial Solutions continues to hold a positive view on IDP Education Ltd based on recent performance.
- There is excitement surrounding IDP's latest results, suggesting potential for further upgrades.
- The fund manager expresses a preference for avoiding political influences in investment decisions.
- Focus remains on identifying alternative opportunities within the smaller end of the market.
- Overall sentiment is cautious but optimistic regarding IDP's prospects.
Maple-Brown Abbott
17 Oct 2025
$6.51
Summary
- Maple-Brown Abbott has placed a sell recommendation on IDP Education Ltd.
- The stock has increased 80% from its lows.
- IDP experienced a better reporting season and outlook than anticipated.
- The company was significantly shorted prior to the results.
- Despite positive recent performance, the outlook remains cloudy.
- Ongoing anti-immigration rhetoric in key markets poses risks.
- Uncertainty about government policies affecting student migration.
- Meeting 2-3 year growth targets is challenging due to political factors.
- Engaging in the politics game is seen as risky.
Auscap Asset Management
9 Oct 2025
$6.60
Summary
- IDP Education is a global leader in English testing through its IELTS business and student placement services.
- There is a normalisation of excess demand following the pandemic, influenced by strong anti-immigration sentiment.
- The recent decline in student numbers has significantly impacted IDP's earnings.
- IDP is addressing this by removing excess costs added during the post-pandemic period.
- Auscap Asset Management believes the negative sentiment towards students will dissipate and demand will return to growth.
- Education is a significant export in most markets IDP operates in, with universities relying on international student revenue.
- The recent volatility presents an attractive opportunity to invest in IDP at favorable prices.
ECP Asset Management
30 Sept 2025
$6.57
Summary
- IDP Education (IEL) outperformed in September following its FY25 results.
- Announced a much larger cost-out program than expected that should annualise in FY27.
- Provides a more efficient cost base into more normalised operating conditions.
- The results extinguished investor concerns surrounding its balance sheet.
- No immediate need to raise capital identified.
- While conditions remain challenging in the short term, IEL continues to execute.
- Retained all clients and upselling to 60 universities.
- Added another 50 quality institutions to its client base.
Oracle Advisory Group
30 Sept 2025
$6.57
Summary
- IDP bounced strongly due to results exceeding low expectations.
- Despite overall results not being great, the market anticipated even worse outcomes.
- On the day of the full year result, the stock increased by 29.7%.
- As of 30th September, the stock has risen 87.6% from June's profit warning lows.
- Global student placement volumes are still in a declining mode.
- Regulatory conditions are unlikely to ease in FY26.
- The stock is currently very attractively priced.
- Oracle Advisory Group continues to hold their position.
QVG Capital
30 Sept 2025
$6.57
Summary
- IDP Education re-entered the portfolio in August.
- QVG Capital acknowledges ongoing challenges with regulatory headwinds in destination countries for international students.
- There is intensifying competition in the IELTS English Language test sector.
- The current position size reflects the uncertainty of whether the worst is behind IDP.
- September’s strong performance, with the stock up 18%, was attributed to broker data indicating a potential growth in IELTS volumes, as evidenced by increased web traffic.
Clime Investment Management
30 Sept 2025
$6.57
Summary
- Clime Investment Management initiated a position in IDP Education (IEL) during the month, viewing the current dislocation in its share price as a compelling long-term opportunity.
- Near-term volumes remain under pressure due to tightened student visa settings across key markets, seen as a cyclical headwind rather than a structural shift.
- IEL is a global leader in student placements and English testing, characterized by strong brand equity and a robust balance sheet.
- Clime Investment Management notes rising demand from emerging markets as a positive factor for IEL's future growth.
- IDP Education contributed positively in September, with its share price rebounding after a period of underperformance.
- Investor concerns around the balance sheet eased following the FY25 result, which highlighted further cost-saving opportunities.
- While near-term regulatory headwinds persist, IEL is actively managing them.
- IEL's global footprint, strong brand, and ongoing investment in innovation continue to support its long-term position in the international education sector.
Forager Funds
30 Sept 2025
$6.57
Summary
- Forager Funds observes early signs of recovery for IDP Education Ltd.
- Financial year 2025 was challenging, with a 15% decline in group revenue and a 58% drop in net profits.
- Government restrictions on international students severely impacted placement and testing volumes.
- IDP Education connects students from Asia and the Middle East with higher education providers in English-speaking countries.
- Acquisition of British Council’s Indian operations made IDP the exclusive IELTS test provider in India.
- The international education sector boomed post-COVID, with record levels of international enrolments.
- Political pressures led to caps and restrictions on student numbers, affecting IDP's performance.
- Australian government recently announced a 9% increase in student caps, signaling potential policy stabilization.
- IDP expected to outperform market growth rates due to its strong market position.
- IELTS remains the most accepted English language test globally, with growth outside India.
- IDP has implemented cost reductions, achieving a 5% cut in 2025 and planning a further 7% reduction for 2026.
- Long-term demand for international student mobility remains robust, averaging 7% growth annually since the late 1990s.
- IDP's share price has nearly doubled from its low, now trading at around 15 times next year’s after-tax earnings.
- With improving student flows and cost management, Forager Funds believes IDP is positioned for future growth.
Auscap Asset Management
24 Sept 2025
$5.70
Summary
- IDP Education (IEL) share price experienced a decline following a soft trading update.
- The primary concern is the weakening of international student volumes into Australia.
- IDP’s IELTS test volumes have faced challenges due to slowed visa processing.
- Increased competition has emerged as the British Council regained market share.
- This situation has led to pressure on margins and a downgrade in company guidance.
- Auscap Asset Management maintains a cautious stance, acknowledging that while IDP is a high-quality business with strong long-term structural tailwinds, short-term earnings are under pressure.
- The regulatory environment affecting student flows remains uncertain, prompting careful monitoring of the position.
ECP Asset Management
31 Aug 2025
$5.91
Summary
- IDP Education (IEL) outperformed in August following the release of its FY25 results.
- The company announced a much larger cost-out program than expected, which is set to annualise in FY27.
- This program is expected to provide a more efficient cost base into more normalised operating conditions.
- The results alleviated investor concerns regarding the balance sheet and the need for capital raising.
- Despite challenging short-term conditions, IEL continues to execute effectively.
- The company has retained all clients and successfully upsold to 60 universities.
- Additionally, IEL has added 50 quality institutions to its client base.
Forager Funds
18 Aug 2025
$4.75
Summary
- Forager Funds views the recent Australian government policy allowing an additional 25,000 international students as a positive shift for the education sector.
- The fund manager initiated a position in Idp Education Ltd due to its potential recovery from being a "heavily beaten up stock".
- Steve Johnson believes that the current challenges facing international student numbers are temporary and will eventually improve.
- Forager Funds emphasizes the importance of education as a key export for Australia, Canada, and the UK.
- The fund manager notes that sentiment in the education sector is expected to improve with government support.
- Johnson suggests that the market will need to recognize the long-term value of international education despite current pressures.
Airlie Funds Management
30 June 2025
$3.67
Summary
- Airlie Funds Management sold their investment in IDP due to a deterioration in financial strength.
- The fund misjudged the regulatory impact of anti-immigration policies in IDP’s core education markets.
- A significant factor in the decision was poor cash flow conversion and growing contract assets.
- Although the sale at $10 was painful after buying at $19, it was validated by a substantial recent earnings downgrade.
- The share price fell to $3.82 by the end of the fiscal year.
- This experience highlights the importance of iteratively assessing stocks to avoid compounding errors.
Oracle Advisory Group
30 June 2025
$3.67
Summary
- Oracle Advisory Group notes that IDP Education Ltd anticipates a 28-30% decrease in student placement volumes for FY25.
- Language testing volumes are projected to drop by 18-20% compared to FY24.
- The impact on revenue is expected to be partially mitigated by an increase in fee growth.
- IDP's Adjusted FY25 EBIT is now forecasted to be in the range of $115-125m.
- Adjusted Overhead costs for H2 FY25 are estimated to be about 5% below H2 FY24.
- For the first three quarters of FY25, international student volumes are down 28% compared to the same period last year.
- Despite the profit warning being disappointing, Oracle Advisory Group believes the market's 50% markdown is excessive.
- IDP's stock peaked in October 2021 at around $37.5 and has been on a decline for 3.5 years.
- While the previous analysis underestimated the negative news, the stock's current trading reflects emotional rather than fundamental factors.
- Taking a contrarian view may reveal potential upside amidst the prevailing pessimism.
Smallco Investment Manager
30 June 2025
$3.67
Summary
- Smallco Investment Manager notes that IDP Education (IEL) is down -61%, significantly impacting portfolio performance.
- After realizing significant profits early, the investment has underperformed over the last two years.
- The firm acknowledges overestimating IDP’s ability to manage the slowdown in global international student flows.
- Increased competition in the English language testing sector has further affected performance.
- Despite current challenges, Smallco Investment Manager believes IDP’s student recruitment business is well-positioned for future recovery.
- However, with a rapid turnaround unlikely in the near term, Smallco Investment Manager retains only a small position in IDP Education.
Paradice Investment Management
30 June 2025
$3.67
Summary
- Paradice Investment Management initiated a small position in IDP Education Ltd (IEL) earlier this year due to positive trends in UK student visa applications.
- In the fourth quarter, these positive trends dissipated, leading to significant challenges for the company.
- Poor cost management resulted in a sizeable downgrade, causing the stock to decline by 61.0% for the quarter.
- Despite these challenges, Paradice Investment Management added to their position, which now represents approximately 1.2% of the Fund.
- The fund manager believes the stock is currently oversold.
- Future increases in their position will depend on improved cost management or growth in visa applications.
Antares Capital
30 June 2025
$3.67
Summary
- Antares Capital notes that IDP Education Ltd is facing significant challenges due to policy uncertainty in key markets affecting international student placements.
- The company anticipates a 30% drop in student placements and a 20% decline in language testing volumes for FY25, resulting in an estimated 50% fall in EBIT.
- The international education market has shown strong recovery post-COVID, with competitors like New Oriental Education experiencing 30-40% growth in 2023/24.
- The UK has surpassed the US as the preferred study destination, with Australia following closely, while other regions like the EU and East Asia are gaining popularity.
- Despite the government’s “double reduction policy” in China, demand for private education remains robust, driving prices higher due to supply shortages.
- IDP's planned entry into the IELTS market through a partnership with New Channel is acknowledged, although it is viewed as a small segment of the broader education ecosystem.
- While the appetite for international education is positive for IDP, the lower international student numbers present ongoing challenges.
- Antares Capital's sentiment towards IDP Education has improved following recent visits, but they will monitor the IELTS launch closely before making further assessments.
- IDP Education's share price suffered a significant decline due to management's downgrade of FY25 guidance, reflecting market volatility and policy headwinds.
- Despite current challenges, Antares Capital remains confident in the long-term value of international education and IDP's potential to recover and enhance shareholder value over time.
Clime Investment Management
30 June 2025
$3.67
Summary
- Clime Investment Management exited their position in IDP Education in June.
- Shift in confidence regarding the investment thesis was a key driver for the decision.
- Admiration for IDP’s global market leadership and strong institutional partnerships remains.
- Ongoing challenges include tightened visa policies and prolonged processing delays.
- Increased regulatory uncertainty across key markets has impacted volumes and sentiment.
- Unpredictable policy settings led to an unfavorable risk-reward balance.
- Proceeds from the sale have been redeployed into higher conviction opportunities within the portfolio.
- IDP Education detracted from performance in June due to persistent headwinds.
- Weakness in student visa approvals has negatively affected volumes and sentiment.
- Share price returned to levels last seen at its 2015 listing.
- While long-term fundamentals are sound, the near-term outlook is expected to remain difficult.
ECP Asset Management
30 June 2025
$3.67
Summary
- ECP Asset Management notes that IDP Education Ltd (IEL) underperformed in June due to a downgrade in FY25 earnings outlook.
- The downgrade is attributed to uncertainty surrounding government policies in major markets, leading to lower than expected student placement volumes.
- IEL's current cost base is set up for materially higher volumes than what is anticipated this year, resulting in cyclical low margins and earnings at half of the previous year.
- The company’s margins are 30-40% higher even with significantly lower revenue, highlighting the severity of the current situation and the potential opportunity in a normalized environment.
- IEL has announced a cost-out program, with details expected in August, aimed at stabilizing earnings until trading conditions improve.
- Despite trading at a market multiple on cyclically low margins, the pace and magnitude of recovery remains uncertain.
ECP Asset Management
31 May 2025
$7.47
Summary
- ECP Asset Management notes that IDP Education Ltd (IEL) underperformed in May.
- The UK government released a white paper suggesting further restrictions on international student policies.
- The US announced plans to revoke visas for Chinese students linked to the CCP in critical fields.
- There have been numerous changes to government policies in Canada and Australia.
- These developments have raised concerns about declining volumes into FY26.
- ECP Asset Management continues to monitor the situation closely.
Clime Investment Management
31 May 2025
$7.47
Summary
- IEL underperformed in May due to ongoing negative headlines.
- Pressure from tightened international student visa settings in key study destinations has impacted performance.
- Despite current industry headwinds, Clime Investment Management believes IEL is well positioned as the market leader.
- IEL is expected to benefit from an eventual recovery in structural demand for international education.
- Recovery is anticipated as policy settings stabilize following a unique synchronisation of global Federal elections.
QVG Capital
31 May 2025
$7.47
Summary
- QVG Capital updates their investment thesis on Idp Education Ltd.
- IPD Group downgraded earnings due to a slowdown in the distribution of electrical products into commercial construction.
- Timing delays in the project side of the business are impacting performance.
- IPD is positioned to benefit from the re-wiring of the grid for renewable energy and growth in data centres.
- The company has no net debt, indicating strong financial health.
- The board and management demonstrate strong alignment with shareholders.
- Medium-term expectations include mid-single digit organic growth, complemented by acquisitions.
- IPG has a track record of making acquisitions with a low-risk strategy.
- Current valuation at 12x forward earnings with potential for acquisitive upside allows for patience.
- Despite a recent earnings update missing EBITDA estimates by 4%, indicating a lack of organic growth.
- This is the first decline in earnings in IPG's listed history.
- The main headwind is a lack of construction activity in commercial property.
- This headwind is not expected to constrain growth indefinitely.
- Investors are compensated with a double-digit pretax earnings yield in the meantime.
Clime Investment Management
30 Apr 2025
$8.86
Summary
- IEL detracted during the month due to ongoing noise surrounding immigration policies during Canadian and Australian elections.
- With key global elections now complete, greater policy certainty is expected to positively influence student sentiment towards study destinations.
- This is anticipated to benefit IEL's IELTS and Student Placements earnings.
- Clime Investment Management continues to see IEL as mispriced growth.
- The market appears to be factoring in structural earnings impairment rather than recognizing the temporary impacts typical of global election cycles.
Oracle Advisory Group
31 Mar 2025
$9.41
Summary
- Oracle Advisory Group previously exited IDP Education in November 2023 due to concerns over regulatory developments and declining student placement volumes.
- IDP stock has decreased approximately 57% since the fund's exit, prompting a reevaluation of the investment.
- The fund manager believes IDP is a high-quality business showcasing a 20% plus operating margin under normal conditions.
- IDP exhibits high pricing power and very low debt levels, enhancing financial stability.
- The company is poised to benefit from the structural growth story of skilled migration to English-speaking countries.
- Oracle Advisory Group perceives the stock as massively undervalued, particularly in light of current depressed student placement and testing volumes.
- The fund manager took a contrarian view to initiate a position in IDP, capitalizing on the prolonged downtrend over the last three years.
- Recent stock weaknesses were attributed to general market downturns rather than stock-specific issues.
Clime Investment Management
31 Mar 2025
$9.41
Summary
- Clime Investment Management has increased the portfolio weighting in IEL due to market weakness.
- There is a foreseeable path for stabilising and improving student placement volumes post a synchronised global election cycle.
- IEL is expected to take market share in the international education sector.
- The long-term demand for international education remains strong.
- Pricing power is supported by underlying operating conditions, which is seen as a favourable tailwind for IEL's earnings.
- There is potential for meaningful upside as operating leverage improves in a more normalised global international student policy setting.
Airlie Funds Management
31 Mar 2025
$9.41
Summary
- Airlie Funds Management sold their investment in IDP Education due to a poor result that raised more questions than answers regarding working capital and cash flow.
- The decision to exit was influenced by a deteriorating balance sheet and concerns over the divergence between EBITDA and cash flow.
- Despite the possibility of selling near the bottom of the regulatory cycle, Airlie Funds Management felt that further downside was likely.
Clime Investment Management
31 Jan 2025
$13.34
Summary
- IEL is a leading global provider of education and migration services, specializing in English Language Testing (IELTS) and assisting students with university applications and enrolments.
- Following a period of disruption due to global political uncertainty, Clime Investment Management anticipates a path to policy and volume normalization from FY26 onwards.
- Increased industry regulation is expected to favour high-quality operators, enhancing IEL's competitive position.
- Clime believes IEL’s global market position is undervalued, bolstered by strong relationships with governments and universities.
- Continued investment in technology is driving product innovation and growth above industry standards.
- Current earnings forecasts are depressed by cyclical factors rather than structural issues, suggesting that the current valuation underestimates long-term earnings potential.
Oracle Advisory Group
31 Dec 2024
$12.63
Summary
- Oracle Advisory Group updates its investment thesis on IDP Education (IEL).
- IDP has appeared on the loser’s list for both 2023 and 2024.
- The funds currently have a miniscule 0.2% portfolio weight in IDP.
- IDP's downward trend followed an announcement of 20-25% decline in student placement volumes for FY25.
- The decline was central to the bear thesis regarding IDP.
- As the situation evolves, Oracle Advisory Group is becoming more positive about IDP.
Airlie Funds Management
31 Dec 2024
$12.63
Summary
- IDP Education has experienced a decline of -21% due to ongoing policy uncertainty in key markets including Australia, Canada, and the UK.
- Airlie Funds Management acknowledges that this investment has been poorly timed.
- Despite challenges, Airlie Funds Management remains hesitant to divest from a quality world-leading operation at what appears to be the bottom of the cycle.
- Initial expectations regarding the quick resolution of the immigration/student intake debate have proven to be incorrect.
QVG Capital
30 Nov 2024
$12.53
Summary
- IDP Education has faced challenges due to falling student Visa approvals linked to government migration reduction efforts in Australia and Canada.
- QVG Capital expects IDP to gain market share despite the downturn but has reduced their position for better short-term capital allocation.
- IPD Group has revenue exposure to volatile commercial construction activities.
- Initial expectations of commercial construction weakness being offset by Data Centre and electric vehicle infrastructure projects were proven incorrect.
- Timing delays have resulted in first half earnings being approximately 10% below expectations.
- Despite these challenges, QVG Capital has maintained their position in IPD due to ongoing medium to long-term tailwinds.
- Encouragingly, IPD’s Founder, Director, and largest shareholder purchased 1M shares on the market this month.
ECP Asset Management
31 Oct 2024
$13.93
Summary
- IDP Education Ltd (IEL) underperformed in October.
- Regulatory newsflow in Canada has continued to impact performance.
- Escalating political tensions between India and Canada are a concern.
- During the AGM, IEL reiterated guidance for a 20-25% decline in key markets.
- IEL expects to materially outperform through market share gains.
- ECP Asset Management continues to view this as a short-term cyclical change in policy settings.
- IEL is positioned as the best player to gain during the recovery.
QVG Capital
30 June 2024
$14.88
Summary
- IDP downgraded FY24 and FY25 earnings expectations;
- QVG Capital had previously flagged this likelihood in prior monthly reports;
- Encouraged by IDP's cost management actions amidst regulatory challenges;
- Mindful that FY25 numbers, especially in the first half, may not be favorable;
- Patience is required to see IDP's competitive position and structural advantages reflected in reported numbers.
QVG Capital
30 Apr 2024
$16.30
Summary
- IDP continues to face challenges as student placement and English Language testing volumes are pressured by regulatory actions in Canada, Australia, and the UK aimed at reducing migration and international student numbers.
- Consensus earnings expectations for FY25 are considered too high, with a flat earnings outcome being more likely than the projected 8-9% EBIT growth.
- Long-term structural drivers for English Language testing and demand for offshore education remain intact.
- QVG Capital remains confident that IDP will capture significant market share during this challenging period.
- The market has largely discounted the short-term headwinds faced by IDP.
QVG Capital
31 Mar 2024
$17.68
Summary
- IDP continues to suffer as Canada and Australia tighten criteria around enrolment of international students to alleviate housing pressures.
- Lower student placement and English Language testing volumes indicate that FY25 earnings expectations are too high.
- QVG Capital has chosen to ‘pick ‘n stick’ with the stock due to its long-term competitive position in student placement.
- Long-term prospective returns on the stock look compelling, suggesting potential for recovery and growth.
Oracle Advisory Group
31 Dec 2023
$19.82
Summary
- Oracle Advisory Group reduced their exposure to IDP Education Ltd due to ongoing diplomatic tensions between India and Canada.
- Canada accounts for approximately 24% of total IDP course enrolments.
- About 53% of IDP course enrolments come from students in India.
- Due to diplomatic issues, Canadian immigration authorities can only process around 50% of visa applications from India.
- Given IDP's status as a high growth, high multiple stock, it cannot afford any profit warnings.
- In response to these challenges, Oracle Advisory Group moved to reduce their risk exposure and invest in other attractive opportunities.
Monash Investors
31 May 2023
$21.82
Summary
- Monash Investors notes a significant stock decline of -23% for IDP Education (ASX:IEL) following the addition of four new English language test providers by the Canadian government.
- Expected earnings per share (EPS) downgrades are around 8% due to the market adjustment.
- Nonetheless, EPS growth forecasts still exceed 20% per annum over the next three years.
- The primary growth driver for IDP Education, Student Placement, continues to represent a robust growth opportunity.
- This growth potential is currently underappreciated in the company's share price.
- Monash Investors continues to hold the stock based on these fundamental growth attributes.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Idp Education Ltd (ASX:IEL)?
Fund managers including Monash Investors, Oracle Advisory Group, Airlie Funds Management, QVG Capital, Antares Capital, Paradice Investment Management, Smallco Investment Manager, ECP Asset Management, Clime Investment Management, Seneca Financial Solutions, Maple-Brown Abbott, Auscap Asset Management, Forager Funds, Pendal Group and Elston Asset Management have invested in Idp Education Ltd (ASX:IEL).
Why do fund managers invest in Idp Education Ltd?
Fund managers invest in IDP Education Ltd due to its leading position in the international education sector and strong fundamentals despite recent challenges. Factors such as a high operating margin and pricing power support its resilience. The company has a solid balance sheet with low debt and is well-positioned for future growth, benefiting from structural demand for international education. While current student placement volumes are down, analysts see potential for recovery as market conditions normalize. The stock's recent decline has made it attractive from a valuation perspective, prompting contrarian investment strategies.
What happened to Idp Education Ltd (ASX:IEL)?
Fund managers are invested in IDP Education Ltd due to its status as a global leader in student placement and English language testing, particularly through its IELTS business. Despite current challenges including declining student volumes and regulatory headwinds, many believe the long-term demand for international education will recover. The company is implementing significant cost-cutting measures and is well-positioned to benefit from a return to normalcy in student migration. While visibility remains limited, the firm is expected to outperform in a stabilizing market, making it an attractive opportunity for long-term growth.
What is the short interest in Idp Education Ltd (ASX:IEL)?
The short interest in Idp Education Ltd (ASX:IEL) is 12.51% which makes it the fifth most shorted stock on the ASX. Of the 278.3M shares that Idp Education Ltd has on issue, 34.8M have been sold short.
What does Idp Education Ltd (ASX:IEL) do?
IDP Education Ltd. engages in the education business, which provides placement of international students into education institutions in Australia, the United Kingdom, the United States, Canada, New Zealand, and Ireland. The firm operates through the following geographical segments: Asia, Australasia, and Rest of World. The Asia segment consists of operations in Bangladesh, Cambodia, China, Hong Kong, India, Indonesia, Japan, Laos, Malaysia, Mauritius, Myanmar, Nepal, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, and Vietnam. The Australasia segment focuses on Australia, Fiji, New Zealand, and New Caledonia. The Rest of World segment includes Argentina, Azerbaijan, Bahrain, Brazil, Canada, Chile, Colombia, Cyprus, Ecuador, Egypt, Germany, Ghana, Greece, Iran, Ireland, Italy, Jordan, Kazakhstan, Kenya, Kuwait, Lebanon, Mexico, Morocco, Nigeria, Oman, Pakistan, Peru, Poland, Qatar, Romania, Russia, Saudi Arabia, Spain, Switzerland, Türkiye, Ukraine, Uruguay, Uzbekistan, the United Arab Emirates, the United Kingdom, and the United States of America. The company was founded in 1969 and is headquartered in Melbourne, Australia.
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