Intueri Education Group Ltd share price soars 38%

Upbeat market update sends Intueri Education Group Ltd (ASX:IQE) share price soaring

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Intueri Education Group Ltd (ASX: IQE) saw its share price rocket up 38% today to 45 cents after the New Zealand-based vocational education provider gave an upbeat update to the market.

Here's what the company said,

"The tightening regulatory environment in Australia has resulted in a number of sanctions against vocational education providers in recent weeks, culminating in a high-profile listed Australian vocational education provider announcing it had been placed into voluntary administration."

The company in question was Vocation Ltd (ASX: VET). Another vocational education provider, Australian Careers Network Ltd (ASX: ACO) shares are also suspended while the Australian Competition and Consumer Commission (ACCC) and the Commonwealth Department of Education and Training have commenced legal action against two of the company's subsidiaries.

Intueri has been tarred with the same brush, after reporting last week that the Tertiary Education Commission (TEC) was undertaking reviews of two of Intueri's schools, which could see earnings negatively impacted by between $4 and $5 million. Investors took a big stick to the share price following that announcement, beating it down more than 13% on the day, and the share price continued to fall through the week.

Intueri went on,

"The Intueri Board believes these events have impacted on overall investor confidence in the wider [vocational education] sector, however it is important to note that Intueri's business model is significantly different from those under review in Australia."

The company says it continues to generate revenue growth, strong earnings margins, and solid cash flow. Intueri also says earnings margins are expected to remain above 20%, generating a solid and stable cash flow.

Investors were obviously heartened by the news, sending shares soaring.

Foolish takeaway

While Intueri says that its business model is significantly different from those under review in Australia, the company doesn't say how it differs.

The problem for the education provider is that a sector-wide clamp down on fees paid by the government to vocational education providers is highly likely. That could have industry-wide effects beyond just those with significant government funding, and bad news for Intueri and its shareholders.

 

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »