Contrasting Gaotu Techedu (GOTU) & Its Rivals

Gaotu Techedu (NYSE:GOTU) is one of 166 publicly-traded 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 valuation, analyst recommendations, dividends, earnings, profitability, risk and institutional ownership.

Institutional & Insider Ownership

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

Risk & Volatility

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

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%

Valuation & Earnings

This table compares Gaotu Techedu and its rivals gross revenue, earnings per share 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.

Analyst Recommendations

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

	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 clearly believe Gaotu Techedu has less favorable growth aspects than its rivals.

Summary

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

About Gaotu Techedu

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.