Analyzing 17 Education & Technology Group (NYSE:YQ) and KinderCare Learning Companies (NYSE:KLC)

17 Education & Technology Group (NYSE:YQ) and KinderCare Learning Companies (NYSE:KLC) are both small-cap consumer discretionary companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, earnings and analyst recommendations.

Insider and Institutional Ownership

3.5% of 17 Education & Technology Group shares are owned by institutional investors. 23.1% of 17 Education & Technology Group shares are owned by company insiders. Comparatively, 5.8% of KinderCare Learning Companies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for 17 Education & Technology Group and KinderCare Learning Companies, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
17 Education & Technology Group	0	1	1	0	2.50
KinderCare Learning Companies	4	5	1	0	1.70

KinderCare Learning Companies has a consensus target price of $4.06, suggesting a potential upside of 118.71%. Given KinderCare Learning Companies’ higher possible upside, analysts plainly believe KinderCare Learning Companies is more favorable than 17 Education & Technology Group.

Volatility & Risk

17 Education & Technology Group has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, KinderCare Learning Companies has a beta of 3.78, indicating that its share price is 278% more volatile than the S&P 500.

Earnings and Valuation

This table compares 17 Education & Technology Group and KinderCare Learning Companies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
17 Education & Technology Group	$248.49 million	0.15	-$43.92 million	($1.28)	-2.75
KinderCare Learning Companies	$2.73 billion	0.08	-$112.88 million	($3.98)	-0.47

17 Education & Technology Group has higher earnings, but lower revenue than KinderCare Learning Companies. 17 Education & Technology Group is trading at a lower price-to-earnings ratio than KinderCare Learning Companies, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares 17 Education & Technology Group and KinderCare Learning Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
17 Education & Technology Group	-113.55%	-38.90%	-28.18%
KinderCare Learning Companies	-17.23%	6.65%	1.21%

Summary

KinderCare Learning Companies beats 17 Education & Technology Group on 7 of the 13 factors compared between the two stocks.

About 17 Education & Technology Group

17 Education & Technology Group, Inc. engages in the provision of educational technology solutions. Its in-school plus after-school integrated model delivers data-driven teaching, learning and assessment products to teachers, students and parents. The firm offers online K-12 large-class after-school tutoring services that complement students’ in-school learning. The company was founded by Jia Wei Gan and Bing Yuan on October 30, 2012 and is headquartered Beijing, China.

About KinderCare Learning Companies

KinderCare Learning Companies Inc. is a provider of high-quality early childhood education by center capacity. KinderCare Learning Companies Inc. is based in PORTLAND, Ore.