Well thats interesting.

The Canadian Immigration Department (IRCC) has announced they will now accept test results from four new english testing schemes from mid August. This is for their Student Direct immigration stream.

IDP will therefore no longer have a regulation advantage for its IELTS testing - though it should be noted this is bringing Canada into line with other jurisdictions such as the UK and Australia. While IELTS is the most recognised test globally, its clear there are now some competitive pressures.

Not sure how to interpret this for long run growth assumptions, but am far more interested in the story given the 15% drawdown on the stock today.

I see IEL as one of the best structural growth stocks on the ASX.

Seek must still be regretting the decision to spin IEL out and its an interesting name to consider as part of a re-opening, returning to the new normal basket of names out there. A change in management is always a bit of a nervy time, especially when the new CEO is coming from Adore Beauty.

The business has very favourable metrics for a growth business - be that profit margins, cash flow, ROE etc - but the issue is often what price to pay.

At current prices and assuming NPAT of ~$160m for FY23, IEL is trading on 48x earnings so by no means cheap. However, as the world comes back online and international student mobility increase, I think theres very real potential to see strong revenue and profit growth due to the operational leverage in the business.

Ita also worth noting the strong institutional ownership of IEL by a large number of domestic growth equity managers. Because of the grace afforded to the business by many of these holders, I would expect the multiple to continue being strongly above market for as long the tailwinds of international student mobility continue, and of course provided IEL can continue to execute.

At $28 I am an interested onlooker with a minor position but would move into the business more heavily on any compression in valuation.