Reviewing Gaotu Techedu (GOTU) and Its Competitors

Gaotu Techedu (NYSE:GOTU) is one of 166 public companies in the “Diversified Consumer Services” industry, but how does it compare to its rivals? We will compare Gaotu Techedu to similar businesses based on the strength of its risk, analyst recommendations, valuation, earnings, dividends, institutional ownership and profitability.

Profitability

This table compares Gaotu Techedu and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gaotu Techedu	-5.00%	-26.89%	-5.73%
Gaotu Techedu Competitors	-3.43%	-28.38%	2.46%

Risk & Volatility

Gaotu Techedu has a beta of 0.73, meaning that its stock price is 27% less volatile than the S&P 500. Comparatively, Gaotu Techedu’s rivals have a beta of 0.47, meaning that their average stock price is 53% less volatile than the S&P 500.

Institutional and Insider Ownership

48.4% of Gaotu Techedu shares are held by institutional investors. Comparatively, 49.0% of shares of all “Diversified Consumer Services” companies are held by institutional investors. 44.9% of Gaotu Techedu shares are held by company insiders. Comparatively, 19.5% of shares of all “Diversified Consumer Services” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for Gaotu Techedu and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gaotu Techedu	1	0	0	0	1.00
Gaotu Techedu Competitors	1433	3426	5275	196	2.41

As a group, “Diversified Consumer Services” companies have a potential upside of 64.30%. Given Gaotu Techedu’s rivals stronger consensus rating and higher probable upside, analysts plainly believe Gaotu Techedu has less favorable growth aspects than its rivals.

Valuation and Earnings

This table compares Gaotu Techedu and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Gaotu Techedu	$878.98 million	-$46.23 million	-10.76
Gaotu Techedu Competitors	$3.24 billion	$219.82 million	11.89

Gaotu Techedu’s rivals have higher revenue and earnings than Gaotu Techedu. Gaotu Techedu is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Summary

Gaotu Techedu rivals beat Gaotu Techedu on 10 of the 13 factors compared.

Gaotu Techedu Company Profile

Gaotu Techedu Inc., a technology-driven education company, provides learning services, educational content, and digitalized learning products in the People's Republic of China. The company offers traditional online academic subject tutoring services that covers academic subjects, such as mathematics, English, Chinese, physics, chemistry, biology, history, geography, and political science for students; non-academic tutoring services; personal interest courses comprising chess learning, family relationships and education, humanities, and science courses; and professional courses primarily for college students and adults preparing for professional qualification exams, such as teacher's qualification, Chartered Financial Analyst designation, Certified Public Accountant designation, and other exams. It also offers admission courses for admission tests and interviews, including national-post graduate entrance examination, civil service examinations, and others; foreign language courses; overseas study related services; and courses to prepare and pass certain language exams for study abroad, such as IELTS and TOEFL. In addition, the company designs and develops course outlines, interactive courseware, practice exercises, and lesson notes; publishes reference books comprising Chinese dictionary, dictionary of idioms, and past exam questions for the college entrance examination; and develops, expands, and upgrades education-centric digital products and solutions, as well as learning apps. Further, it offers books and digitalized auxiliary learning tools, such as smart devices and translation pens; and online tutoring services. The company was formerly known as GSX Techedu Inc. and changed its name to Gaotu Techedu Inc. in June 2021. Gaotu Techedu Inc. was incorporated in 2014 and is headquartered in Beijing, China.