By Brad Sorensen, CFA
NYSE:GNS
READ THE FULL GNS RESEARCH REPORT
Genius Group (NYSE:GNS) was founded by entrepreneur and best-selling author Roger James Hamilton and went public on the NYSE in April of 2022. Genius appears to be aiming to be a “one-stop” online education platform that has offerings for people from 0-100. Before the IPO in April 2022, Genius consisted of four companies (referred to by the company as “Pre-IPO Companies”) that were largely dedicated to entrepreneurial ventures and will be described in detail below. But in an effort to expand its offerings and broaden its portfolio, coinciding with the IPO, Genius acquired four more companies (referred to as “IPO Acquisitions”) to give Genius a total of eight companies under its umbrella and a roster of offering that can reach people at virtually any stage of life.
The Market
Why is Genius aggressively expanding its offering? The size of the potential market is enormous and the interest in virtual learning has undoubtedly increased as a result of the remote lives many people have been forced to live over the last couple of years. According to the company, education market intelligence firm HolonIQ is forecasting the global education and training industry to grow to $10 trillion by 2030.
There are many online education companies in the world, especially after the last couple of years. So why should investors consider Genius along with, or above, all the other competitors? This is not to denigrate any online education provider, but rather, point out that Genius Group may be doing things in a different way that might be able to connect in a more effective way with students, both adult and children, who have had a lack of success with some of the existing providers out there. It’s no secret that people learn in different ways, and from our point of view, Genius appears to be offering a different way of learning-one that engages students by learning what they love and teaching them in that way.
The best way to understand why we think GNS is worth a look is to first understand the educational point of view, and how it is delivered, that Genius offers. Let’s start with a look at what Genius views as the differences between a Genius School and a Traditional School:
• Student-based and Personalized vs. Classroom-based and Standardized
• 21st Century Leadership Skills vs. Teaching to the Test
• Collaborative vs. Competitive
• Challenge-based vs. Course-based
• Accelerated learning vs. Rote learning
• Global and flexible vs. Local
• Tech-based vs. Textbook-based
• Multiple Mentors per challenge vs. One teacher per class.
Genius management points out the company’s methodology differs from many learning methodologies. Many methodologies are based on pedagogy—which refers to the science and practice of teaching and guiding a student to achieve specific outcomes in education. Genius is based on andragogy—which refers to the science and practice of how students develop self-directed learning to guide their own development.
As seen above, Genius has a lot going on and has been fairly aggressive about expanding the offerings in their portfolio and has stated that further acquisitions are always on the table as the company looks to grow its business. To this point Genius reported that it had a student base of 2.7 million students at the end of 2021—and 90% of those were from outside of the United States. The company expects that ratio to drop to 50% in 2022 after the acquisitions are integrated into the company.
As seen in the chart—student growth has been stellar over the past couple of years but the keys to the company’s future in our view will be continuing to grow the student count, especially in the United States which is largely an untapped market for Genius, integrate the acquisitions in an efficient manner and cut some of the overlapping costs, while also growing those business lines under the Genius umbrella, and working to raise the conversion rate of free students that move into paying students.
We believe in the vision and leadership of Genius Group and see the story described above developing over the next several years, making GNS worth a look for investors in our view for those with a slightly higher risk tolerance looking for good potential upside.
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