IDP Education vs G8 Education: Which battered ASX stock could rebound?

IDP Education vs G8 Education shares: Which beaten-down stock could rebound?

Both IDP Education Ltd (ASX: IEL) and G8 Education Ltd (ASX: GEM) have suffered severe share price declines lately, making them prime hunting ground for bargain seekers. If you’re weighing up IDP Education vs G8 Education shares, you’re comparing two education-focused businesses – but with very different operations, risk profiles, and upside potential. Let’s dive into what makes each one standout.

The case for IDP Education

IDP Education is a global player offering English language testing and international student placement services. It’s best known for co-owning IELTS – one of the world’s most prominent English testing systems, widely accepted by governments, universities, and accreditation bodies. Alongside English language assessments, IDP offers international student placement, operates teaching schools in Southeast Asia, hosts education events, and provides consulting services, with offices in more than 50 countries.

Looking at the numbers, IDP Education clocks in with a market cap of $553.89 million and a P/E ratio of 46.22. The trailing dividend yield stands at 4.46%, and year to date, the share price has slumped by 63.5%. According to the latest data, earnings per share sit at $0.044 and dividends per share at $0.09. Franking percentages on dividends have declined recently, with the most recent dividend unfranked – a change from higher franking rates in previous years.

The case for G8 Education

G8 Education operates early childhood education and care centres across Australia, focusing on childcare and early learning. The group’s scale makes it a well-known name in the local sector, emphasising quality and developmental care from infancy through preschool.

Fundamentals show G8 Education with a far smaller market cap at $72.53 million and a P/E ratio of 5.26. The last reported dividend yield is a staggering 20.62% (with 100% franking), and dividends per share stand at $0.06. Notably, the company’s reported earnings per share is negative at –$0.472. Year to date, G8 Education’s shares have tumbled 85.9%, making it one of the market’s hardest hit. Its dividends have consistently been fully franked, offering an added tax benefit for eligible investors.

Valuation comparison

There are some sharp contrasts between IDP Education and G8 Education on core metrics:

Note: G8 Education’s reported P/E ratio does not align with its negative EPS, which suggests the P/E could be based on a different earnings measure (such as underlying or forecast earnings).

IDP Education trades at a much higher multiple, while G8 Education, on paper, looks extremely “cheap” on these numbers – although the underlying business challenges must not be ignored, given the negative EPS.

Recent share price momentum

Comparing recent share price performance up to 30 September 2026:

• As of 30 September 2026, IDP Education closed at $2.02, having gained 3.6% that day, but still down 63.5% year to date.
• On the same date, G8 Education closed at $0.10, unchanged for several days but having fallen 85.9% over the year to date.

Both companies have endured significant value destruction over 2026 so far, but G8’s drop has been notably steeper.

Which is the better buy?

When I weigh these two, I’m looking for not just the biggest discount, but the highest probability of sustainable upside. G8 Education’s 20%-plus dividend yield, with full franking, leaps off the page – but the fact that earnings per share is negative (and the share price has been absolutely smashed) really worries me. A dividend that high against a negative EPS suggests a major risk that payouts could be cut or stopped, and the business model might be under significant stress.

By contrast, IDP Education’s P/E ratio is lofty compared to G8, and the yield is more moderate. However, IDP’s core English language testing and international education business has global scale and is closely tied to long-term student mobility and international migration trends – giving it growth levers that are less cyclical than local childcare. While its dividend franking has recently dropped to zero, prior years had partially franked payments, so this may not be a permanent change.

Both stocks are deeply beaten down, but I’m more comfortable backing a recovery in IDP Education. The worldwide demand for English language proficiency and overseas education isn’t going away, and a market cap of over $500 million suggests the company has financial strength to weather downturns. G8, on the other hand, may offer a monster yield – but with such a steep share price fall and negative earnings, I fear the apparent bargain could be a value trap. My pick for future upside is IDP Education.

The post IDP Education vs G8 Education: Which battered ASX stock could rebound? appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.