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On July 23, 2025, 51Talk opened a Middle East headquarters and Riyadh Learning Center, announcing localized programs and 10,000 donated classes as part of its Saudi rollout. On August 24, 2025, the company ran a citywide campaign in Saudi Arabia including major outdoor advertising and a Back-to-School push. On September 3, 2025, 51Talk disclosed the dismissal of its prior auditor and the engagement of Ernst & Young LLP as its new independent registered public accounting firm, effective September 3, 2025.
Technical Analysis
ADX and Directional Indicators: ADX at 54.61 signals very strong trend strength, amplifying directional readings from the DI lines and increasing near-term momentum risk.
DI+/DI-: DI+ at 30.87 is decreasing, while DI- shows a dip & reversal; both directional readings point toward a bearish price bias against the current valuation, with trend strength confirmed by the high ADX.
MACD: MACD sits at 3.18 with a MACD trend labeled peak & reversal and the MACD below its signal line (3.31); that configuration indicates bearish momentum. A MACD cross above the signal line would flip momentum to bullish, but that signal has not occurred.
MRO: MRO at 40.33 (trend increasing) registers positive, indicating the market price sits above the WMDST target and faces downside pressure consistent with momentum indicators.
RSI: RSI at 66.01 with a peak & reversal trend suggests recent short-term exhaustion and increases the likelihood of a corrective leg before any sustained upside continuation.
Price Structure and Moving Averages: Price closed at $44.85, above the 12-day EMA ($44.67, increasing) and well above the 50-day ($35.61) and 200-day ($24.42) averages, reflecting longer-term strength. Short-term momentum indicators, however, favor a pullback toward short-term support near the SuperTrend lower band ($41.20) unless momentum indicators re-accelerate higher. Volume of 11,174 runs below the 10-day average of 19,873, reducing the conviction behind recent moves.
Fundamental Analysis
Top Line and Profitability: Total revenue: $20,398,000. Revenue growth stands at 11.79%, while revenue growth quarter-over-quarter equals -4.67% and year-over-year equals -26.45%, a divergence across measurement horizons that alters near-term revenue momentum interpretation. Gross profit: $15,217,000 and gross margin of 74.6%, above the industry peer mean gross margin of 49.639% and above the industry peer median, reflecting effective direct-cost control on delivered lessons.
Operating Performance: EBIT and EBITDA both negative at -$2,722,000, producing an EBIT margin of -13.34%, below the industry peer mean EBIT margin of 14.236% and within the industry peer range (low -32.724% to high 32.421%). Operating margin matches the negative EBIT margin; QoQ operating margin improved sharply (up 88.32%) while operating margin YoY declined 39.44%.
Cash, Liquidity, and Capital Structure: Cash totals $27,771,000 with cash and short-term investments at $30,865,000. Current ratio equals 0.70782, below the industry peer low current ratio of 0.74688, indicating tighter short-term liquidity than peers. Total equity sits at -$18,560,000 and total liabilities at $71,378,000; debt to assets is low at 3.70% versus an industry peer mean of 20.613%, reflecting minimal financial leverage despite negative equity.
Cash Flow and Coverage: Operating cash flow equals -$3,047,000 and cash flow margin equals -14.94%; cash conversion indicators show negative cash conversion ratio (-0.99483). Interest coverage reads -15.92, signaling operating losses relative to interest expense and limited coverage capacity.
Returns: Return on assets at -6.19% sits below the industry peer mean of 2.188%, while return on equity at 16.42% exceeds the industry peer mean of 3.416%—the ROE figure interacts with the company’s negative equity and should be interpreted with that balance-sheet context in mind. Return on invested capital equals 10.999% and shows QoQ and YoY improvements.
Valuation Signal: WMDST values the stock as under-valued, a conclusion driven by strong gross margins, growing top-line measures in some horizons, and a cash buffer that offsets operating losses; negative equity, negative operating cash flow, and weak short-term liquidity present offsetting valuation risks.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2025-06-30 |
| REPORT DATE: | 2025-09-19 |
| NEXT REPORT DATE: | 2025-12-19 |
| CASH FLOW | Begin Period Cash Flow | — |
| Operating Cash Flow | $ -3.05 M | |
| Capital Expenditures | — | |
| Change In Working Capital | $ 3.0 M | |
| Dividends Paid | — | |
| Cash Flow Delta | — | |
| End Period Cash Flow | — | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 20.4 M | |
| Forward Revenue | — | |
| COSTS | ||
| Cost Of Revenue | $ 5.2 M | |
| Depreciation | — | |
| Depreciation and Amortization | — | |
| Research and Development | $ 1.2 M | |
| Total Operating Expenses | $ 23.1 M | |
| PROFITABILITY | ||
| Gross Profit | $ 15.2 M | |
| EBITDA | $ -2.72 M | |
| EBIT | $ -2.72 M | |
| Operating Income | $ -2.72 M | |
| Interest Income | $ 58.0 K | |
| Interest Expense | — | |
| Net Interest Income | $ 58.0 K | |
| Income Before Tax | $ -2.89 M | |
| Tax Provision | $ 169.0 K | |
| Tax Rate | 25.0 % | |
| Net Income | $ -3.05 M | |
| Net Income From Continuing Operations | — | |
| EARNINGS | ||
| EPS Estimate | — | |
| EPS Actual | — | |
| EPS Difference | — | |
| EPS Surprise | — | |
| Forward EPS | $ -0.05 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 52.9 M | |
| Intangible Assets | $ 74.0 K | |
| Net Tangible Assets | $ -18.63 M | |
| Total Current Assets | $ 49.7 M | |
| Cash and Short-Term Investments | $ 30.9 M | |
| Cash | $ 27.8 M | |
| Net Receivables | — | |
| Inventory | — | |
| Long-Term Investments | $ 444.0 K | |
| LIABILITIES | ||
| Accounts Payable | — | |
| Short-Term Debt | — | |
| Total Current Liabilities | $ 70.2 M | |
| Net Debt | — | |
| Total Debt | $ 2.0 M | |
| Total Liabilities | $ 71.4 M | |
| EQUITY | ||
| Total Equity | $ -18.56 M | |
| Retained Earnings | — | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | — | |
| Shares Outstanding | — | |
| Revenue Per-Share | — | |
| VALUATION | Market Capitalization | — |
| Enterprise Value | — | |
| Enterprise Multiple | — | |
| Enterprise Multiple QoQ | — | |
| Enterprise Multiple YoY | — | |
| Enterprise Multiple IPRWA | — | |
| EV/R | — | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | -2.852 | |
| Asset To Liability | 0.742 | |
| Debt To Capital | -0.118 | |
| Debt To Assets | 0.037 | |
| Debt To Assets QoQ | -22.986 % | |
| Debt To Assets YoY | 51.288 % | |
| Debt To Assets IPRWA | high: 0.567 median: 0.21 mean: 0.206 COE: 0.037 low: 0.011 |
|
| Debt To Equity | -0.105 | |
| Debt To Equity QoQ | -20.707 % | |
| Debt To Equity YoY | 75.191 % | |
| Debt To Equity IPRWA | high: 1.595 mean: 0.393 median: 0.312 low: 0.031 COE: -0.105 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | — | |
| Price To Book QoQ | — | |
| Price To Book YoY | — | |
| Price To Book IPRWA | — | |
| Price To Earnings (P/E) | — | |
| Price To Earnings QoQ | — | |
| Price To Earnings YoY | — | |
| Price To Earnings IPRWA | — | |
| PE/G Ratio | — | |
| Price To Sales (P/S) | — | |
| Price To Sales QoQ | — | |
| Price To Sales YoY | — | |
| Price To Sales IPRWA | — | |
| FORWARD MULTIPLES | ||
| Forward P/E | -466.928 | |
| Forward PE/G | — | |
| Forward P/S | — | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | 9.375 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.414 | |
| Asset Turnover Ratio QoQ | 1.571 % | |
| Asset Turnover Ratio YoY | 21.646 % | |
| Asset Turnover Ratio IPRWA | COE: 0.414 high: 0.312 mean: 0.236 median: 0.232 low: 0.05 |
|
| Receivables Turnover | — | |
| Receivables Turnover Ratio QoQ | — | |
| Receivables Turnover Ratio YoY | — | |
| Receivables Turnover Ratio IPRWA | — | |
| Inventory Turnover | — | |
| Inventory Turnover Ratio QoQ | — | |
| Inventory Turnover Ratio YoY | — | |
| Inventory Turnover Ratio IPRWA | — | |
| Days Sales Outstanding (DSO) | — | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | — | |
| Cash Conversion Cycle Days QoQ | — | |
| Cash Conversion Cycle Days YoY | — | |
| Cash Conversion Cycle Days IPRWA | high: 104.285 median: 84.876 mean: 60.418 COE: 0 low: -22.108 |
|
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | -0.995 | |
| CapEx To Revenue | — | |
| CapEx To Depreciation | — | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ -18.56 M | |
| Net Invested Capital | $ -18.56 M | |
| Invested Capital | $ -18.56 M | |
| Net Tangible Assets | $ -18.63 M | |
| Net Working Capital | $ -20.50 M | |
| LIQUIDITY | ||
| Cash Ratio | 0.44 | |
| Current Ratio | 0.708 | |
| Current Ratio QoQ | 1.359 % | |
| Current Ratio YoY | 3.598 % | |
| Current Ratio IPRWA | high: 5.391 mean: 2.647 median: 2.547 low: 0.747 COE: 0.708 |
|
| Quick Ratio | — | |
| Quick Ratio QoQ | — | |
| Quick Ratio YoY | — | |
| Quick Ratio IPRWA | — | |
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | -0.719 | |
| Cost Of Debt | 6.191 % | |
| Interest Coverage Ratio | -15.918 | |
| Interest Coverage Ratio QoQ | 110.518 % | |
| Interest Coverage Ratio YoY | 12.712 % | |
| Interest Coverage Ratio IPRWA | high: 62.65 mean: 23.102 median: 11.296 COE: -15.918 low: -31.824 |
|
| Operating Cash Flow Ratio | -0.043 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | — | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | — | |
| Dividend Payout Ratio | — | |
| Dividend Rate | — | |
| Dividend Yield | — | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 16.36 % | |
| Revenue Growth | 11.788 % | |
| Revenue Growth QoQ | -4.666 % | |
| Revenue Growth YoY | -26.454 % | |
| Revenue Growth IPRWA | high: 17.27 % COE: 11.788 % mean: -1.236 % median: -1.518 % low: -14.452 % |
|
| Earnings Growth | — | |
| Earnings Growth QoQ | — | |
| Earnings Growth YoY | — | |
| Earnings Growth IPRWA | — | |
| MARGINS | ||
| Gross Margin | 74.6 % | |
| Gross Margin QoQ | -3.06 % | |
| Gross Margin YoY | -4.484 % | |
| Gross Margin IPRWA | high: 87.08 % COE: 74.6 % mean: 49.639 % median: 49.027 % low: 27.029 % |
|
| EBIT Margin | -13.344 % | |
| EBIT Margin QoQ | 88.315 % | |
| EBIT Margin YoY | -39.442 % | |
| EBIT Margin IPRWA | high: 32.421 % median: 15.1 % mean: 14.236 % COE: -13.344 % low: -32.724 % |
|
| Return On Sales (ROS) | -13.344 % | |
| Return On Sales QoQ | 88.315 % | |
| Return On Sales YoY | -39.442 % | |
| Return On Sales IPRWA | high: 36.885 % median: 17.799 % mean: 15.969 % COE: -13.344 % low: -34.682 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | — | |
| Free Cash Flow Yield | — | |
| Free Cash Flow Yield QoQ | — | |
| Free Cash Flow Yield YoY | — | |
| Free Cash Flow Yield IPRWA | — | |
| Free Cash Growth | — | |
| Free Cash Growth QoQ | — | |
| Free Cash Growth YoY | — | |
| Free Cash Growth IPRWA | — | |
| Free Cash To Net Income | — | |
| Cash Flow Margin | -14.938 % | |
| Cash Flow To Earnings | 1.0 | |
| VALUE & RETURNS | ||
| Economic Value Added | — | |
| Return On Assets (ROA) | -6.191 % | |
| Return On Assets QoQ | 88.348 % | |
| Return On Assets YoY | 59.685 % | |
| Return On Assets IPRWA | high: 5.931 % mean: 2.188 % median: 1.956 % COE: -6.191 % low: -10.078 % |
|
| Return On Capital Employed (ROCE) | 15.79 % | |
| Return On Equity (ROE) | 0.164 | |
| Return On Equity QoQ | 83.41 % | |
| Return On Equity YoY | 79.264 % | |
| Return On Equity IPRWA | high: 0.206 COE: 0.164 median: 0.035 mean: 0.034 low: -0.248 |
|
| DuPont ROE | 17.421 % | |
| Return On Invested Capital (ROIC) | 10.999 % | |
| Return On Invested Capital QoQ | 86.266 % | |
| Return On Invested Capital YoY | 22.524 % | |
| Return On Invested Capital IPRWA | high: 15.681 % COE: 10.999 % mean: 3.52 % median: 2.825 % low: -15.002 % |
|