As a tertiary education institution, Stadio has the opportunity to build a differentiated business that can carve out solid market positions and enjoy reasonable pricing power. This is a far better model than what we saw at Curro, the education group that Stadio was spun out of.
With so much pressure on middle-class families in South Africa, Curro had to keep its fees at levels that people could actually afford. Sadly, inflationary pressures on Curro didn’t slow down just because of affordability issues for customers, so Curro’s margins were constantly being squeezed. This is partly why that group decided to follow a different path.
In stark contrast, Stadio’s share price is up more than 300% over five years. And before you assume that this is thanks only to a depressed Covid base, the share price has jumped 64% in the past 12 months.
With the earnings multiple knocking on the door of 30, the market is clearly enjoying this story. And what’s not to love?
Between December 2019 and December 2025, student numbers grew from 32,053 to 53,303. Revenue more than doubled over that period, while ebitda more than tripled. This is extraordinary — and the group still has plenty of runway.
Ebitda margin climbed from 28.4% in 2024 to 30% in 2025. Despite all the changes during and after the pandemic, over the past six years this margin has remained in an exceptionally tight range of between 27% and 30%, which gives investors a lot of comfort. This comfort translates directly into higher multiples.
In 2025, semester 1 student numbers grew 9% and semester 2 numbers were up 7%. Revenue rose 14%, so there are strong price and mix effects in addition to the uptick in volumes.
The really interesting metric is the mix of contact vs distance learning students. Distance learning is currently 87% of group enrolments. The long-term target is 80%, but Stadio is only too happy to be running at a higher percentage, given the strong contribution margin of additional distance learning students.
With promising recent regulatory changes in the fight by private colleges to be recognised as universities, contact learning is a growth area worthy of investment
In 2025, Stadio generated R1.2bn in revenue in the distance learning segment vs R589m in contact learning. With such similar growth rates in the past year (14% and 15% respectively), contact learning doesn’t seem to be closing the gap. The Durbanville campus project will certainly give it a boost, though.
Contact learning is obviously a more capex-heavy model than distance learning. But with promising recent regulatory changes in the fight by private colleges to be recognised as universities, this is a growth area worthy of investment.
The rest of the group is highly cash generative, so it can self-fund the growth in contact learning while keeping shareholders happy as well. In 2025, Stadio generated R431m in cash from operations and invested R205m in building the Durbanville campus. The company paid R129m to its shareholders in dividends. As the cherry on top, it also invested R73m in net share repurchases.
In 2026, Stadio expects to invest a further R110m in the Durbanville campus. Other campus extensions will require R105m. Stadio is also increasing the investment in curriculum development, with R47m earmarked for that purpose compared with R33m in 2025.
This investment contributes strongly to Stadio’s moat. Logically, it seems that contact learning is harder to replicate than online learning, particularly in terms of securing key sites and achieving the credibility needed to ensure sufficient student numbers for profitability. Additional upside comes from the opportunity for Stadio to close the perceived quality gap between traditional public universities and private colleges.
If university status can be achieved, along with an appealing campus culture that rivals public universities, it’s possible that Stadio will be surprised by the demand for its contact learning facilities. The trick will be to keep allocating capital correctly, something that this management team seems to be capable of doing.
When Stadio tells the market it plans to have 80,000 students by 2030 (an 8% annual growth rate), it’s not some pie-in-the-sky target. The group is well on track to deliver the promise made in the prelisting statement of having 56,000 students by the end of 2026. It would take a brave soul to bet against it achieving the 2030 target.
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