3P LEARNING LIMITED (3PL)
Share Price Analysis and Chart

19/08/2024

3

Equal-weight

$1.20

41.18%

3P Learning's FY24 earnings were below Morgan Stanley and guidance. Unusually, the company did not provide FY25 earnings guidance, but does expect growth in revenue and earnings in FY25.

The broker expects consensus downgrades to reflect both the rebasing from the FY24 guidance miss and the reducing certainty from a
lack of guidance.

3P Learning's customer count was 5.0m versus 5.5m a year ago and 5.4m in the first half.

Equal-weight and $1.20 target retained. Industry view: In Line.

17/06/2024

1

Speculative Buy

$1.64

92.94%

3P Learning's strategy to accelerate growth in the US market, particularly through re-acquiring the school distribution rights to Reading-Eggs, appears to be on track, notes Taylor Collison.

Third-party web traffic and app download data show a significant increase in Reading-Eggs usage, with web traffic up by 36% year-on-year, and by 50% from February to May 31, explains the broker.

On the flipside, the broker notes a -37% reduction in web traffic in February and March for Mathletics, and a -12% decrease in app downloads from December to May, which could impact 3P Learning's annual recurring revenue (ARR).

The analyst's overall revenue growth estimate has been reduced to 5.8% from 10%. 

The Speculative Buy rating is maintained as the consumer environment may improve with Australian wages outgrowing inflation, potentially benefiting B2C growth, explains the broker. No target price is mentioned.

FORECAST
Taylor Collison forecasts a full year FY24 dividend of 0.00 cents and EPS of 3.90 cents.
Taylor Collison forecasts a full year FY25 dividend of 0.00 cents and EPS of 5.10 cents.