The IDP Education Ltd (ASX: IEL) share price has been a disappointing performer over the last 30 days.
Since this time last month, the language testing and student placement company's shares are down 15%.
This means the IDP Education share price is now trading broadly flat in 2021.
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Why is the IDP Education share price down 15% in a month?
Investors have been selling the company's shares over the last 30 days amid weakness in the tech sector and concerns about rising COVID-19 cases in India.
Given that the Indian market is the company's largest market and contributes over a third of its revenue, the terrible situation unfolding in the country looks set to derail IDP Education's recovery.
Is this a buying opportunity?
According to a note out of Morgans, its analysts believe the recent weakness in the IDP Education share price is a buying opportunity for investors.
This morning the broker retained its add rating but trimmed its price target slightly to $28.48.
Based on the current IDP Education share price of $20.85, this represents potential upside of almost 37% over the next 12 months.
What did the broker say?
Morgans said: "The recent COVID-19 outbreaks in India provide a headwind to the recovery. We estimate that India accounts for ~40% of IEL's IELTS testing revenue, which assuming 115k tests per month would equate to ~A$11.8m revenue and ~A$5.2m GP/EBITDA per month."
"Additionally, recent border shutdowns to Indian outbound immigrants (e.g. Canada/Australia) does have the potential to impact Student Placement volumes, however the estimated financial impact is more difficult to ascertain given online vs physical starts," it added.
However, the broker feels it is worth sticking with the company. Especially as it believes IDP Education is well-placed for growth when trading conditions normalise. Morgans is anticipating market share gains and sees opportunities for M&A activities.
It explained: "We believe IEL is well-placed to capitalise on recovering international student demand via improved market share across IELTS/student placement. We note prior to COVID-19, IEL was delivering on its multi-destination student placement expansion well ahead of consensus estimates – a thematic we expect can return in time."
Morgans concluded: "We continue to like IEL as a structural growth story with meaningful leverage to a global reopening. We believe earnings risk lies to the upside as pent-up demand levels are quantified, with M&A providing a potential further catalyst. ADD maintained."
