Morningstar just covered IDP Education in its regular “ask the analyst” column. The analyst’s perspective is rosier than my own.
The analyst feels that IDP’s present woes are mostly connected to student placement, and he isn’t too concerned about English testing. The article notes that:
“IDP’s recent share price troubles – the stock is down more than 50% in the past twelve months – can largely be put down to concerns over the outlook for its placements business.”
This is followed by a great discussion of that business. Do check it out.
Testing only comes up as a “bonus question” at the end. The columnist asks:
“Could Duolingo’s offshoot language testing business, which seems to be growing like a weed, impact the value of IDP’s core IELTS language testing asset?”
The analyst doesn’t think so:
“In short, [the analyst] doesn’t appear to be too concerned at the moment. While he recognises the immense growth and success of the Duolingo English Test’s low-price offering, this business is overwhelmingly skewed to the US market. With just 10% of IELTS volumes coming from the US, this is very much a secondary playing field for IDP’s language testing business. In its core market of academic institutions in Commonwealth countries, IELTS remains by far the preferred option and Duolingo hasn’t gained as much ground.”
And:
“[he] still sees the IELTS test as enjoying a strong advantage over most other tests. With over 11,000 schools, employers and migration authorities accepting IELTS globally, students are drawn to this test due to its wide acceptance. Meanwhile, this large and growing pool of IELTS certified students and visa applicants makes it more attractive for institutions to accept, and so on.”