Zacks Small Cap Research – EEIQ: New Programming: Synergies with Sports Entertainment Initiative, STEM Offerings – Technologist

By M. Marin

NASDAQ:EEIQ

READ THE FULL EEIQ RESEARCH REPORT

New business, recent enrollment trends, revenue growth reflect positive steps in strategic plan

EpicQuest Education Group International Limited’s (NASDAQ:EEIQ) measures to diversify and grow its business includes a recent entrance into the sports entertainment space. We are encouraged by the company’s steps, including this initiative to establish SouthGilmore to operate in the field of sports entertainment and by recent enrollment trends. With SouthGilmore, EEIQ has added a new line of business and an opportunity to grow its blended revenue streams.

Reflecting multiple revenue streams associated with sporting events (ticket sales, sponsorships, merchandising, Food & Beverage, etc.), EEIQ expects to derive substantial revenue from recent AFA exhibition matches in China & future exhibition games. In addition, Davis University received approval this week to offer two STEM degree programs (see below) that EEIQ expects will contribute to higher tuition and service fee revenue.

… as new sports entertainment initiative, academic crossover and synergies

Moreover, EpicQuest established a wholly-owned subsidiary, Gilmore Inv LLC, to offer international educational programs related to kinesiology and recreation education as it believes that the fields of physiology and physical health are becoming increasingly important, and that this new program equips its students with new career options. The company expects that its Gilmore subsidiary will achieve synergies with the SouthGilmore subsidiary in the fitness and sports fields.

The company expects to provide tools to its students to expand their career options within these areas. EEIQ expects to offer kinesiology and recreational education classes beginning in Fall 2024. EpicQuest is optimistic about its prospects, particularly given key global trends, including in physiology, physical health and as exercise and focus on improved fitness, nutrition and public health grow. For instance, according to Forbes,

“Earning a kinesiology degree prepares you for careers in sports management, physical therapy, education, coaching and allied health. Four-year programs feature a broad curriculum, exposing you to the various ways movement can improve people’s well-being. A graduate degree allows you to develop a specialty. You can enroll in kinesiology programs at every educational level, from associate to doctoral programs.”

Upcoming STEM offerings also expected to boost enrollments …

The new Sri Lanka recruitment hub will recruit for both Davis University and EduGlobal College (EEIQ’s O&O [owned and operated] academic institutions), marketing to students in Sri Lanka, India, UAE, Malta, Nepal, Pakistan, Malta, Indonesia, Malaysia and Thailand. Davis University received approval from the Higher Learning Commission (HLC) earlier this week to offer two STEM degree programs that the company expects will contribute to higher tuition and service fee revenue in F2024: 1) an Associate of Applied Science in Data Science and 2) an Associate of Applied Science in Computer Engineering. While EEIQ has broadened its geographic recruiting activities, the company also aims to further penetrate the Chinese student market.

… while recent MU enrollment trends have been strong …

EEIQ expects the number of students from China and India will rise substantially (in the case of China, up at least 100%) and contribute to significant revenue growth. In fact, recent enrollment trends have been strong. For example, at Miami University of Ohio (MU), where EpicQuest offers a broad array of in-person services such as private housing, dining facilities, a student life center and academic guidance, among others, EpicQuest recorded a 72% increase in international high school applications for 2023 and enrollment in 1H23 was up significantly.

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