Gaotu Techedu (NYSE:GOTU) Announces Quarterly Earnings Results

Gaotu Techedu (NYSE:GOTU) announced its earnings results on Tuesday. The company reported $0.02 earnings per share (EPS) for the quarter, Zacks reports. The business had revenue of $245.04 million for the quarter, compared to analysts’ expectations of $233.35 million. Gaotu Techedu had a negative return on equity of 28.85% and a negative net margin of 6.42%.

Here are the key takeaways from Gaotu Techedu’s conference call:

• Gaotu reported 13.2% year-over-year revenue growth to about RMB 1.7 billion, with non-GAAP operating profit of RMB 13.8 million and non-GAAP net profit of RMB 41.4 million. Management said this reflects continued progress under its profitable growth strategy.
• The company said it generated first-quarter profitability for the second consecutive year, helped by improved operating efficiency and resource allocation. R&D and G&A expenses as a share of revenue declined year over year.
• AI is becoming a core capability across curriculum development, content creation, tutoring, and internal workflows. Management believes AI is improving productivity and helping scale teaching and services more efficiently.
• Gaotu highlighted strong performance in non-academic tutoring and college/adult education, with gross billings and revenue in these newer businesses growing more than 15% to 20% year over year. The online portion of non-academic tutoring remained profitable for a second straight first quarter.
• For the second quarter, management guided to RMB 1,578 million to RMB 1,598 million in revenue, implying 13.6% to 15.0% year-over-year growth. The company also said offline expansion is progressing in line with expectations, with further growth planned cautiously by city.

Gaotu Techedu Stock Performance

Shares of GOTU stock opened at $1.68 on Thursday. The firm has a market capitalization of $401.75 million, a price-to-earnings ratio of -6.98 and a beta of 0.60. The company has a debt-to-equity ratio of 0.03, a current ratio of 0.94 and a quick ratio of 0.92. The business has a fifty day moving average of $1.90 and a 200 day moving average of $2.16. Gaotu Techedu has a 1 year low of $1.63 and a 1 year high of $4.13.

Wall Street Analysts Forecast Growth

Separately, Weiss Ratings raised Gaotu Techedu from a “sell (e+)” rating to a “sell (d-)” rating in a research report on Friday, May 8th. One analyst has rated the stock with a Sell rating, Based on data from MarketBeat.com, the company currently has a consensus rating of “Sell”.

Hedge Funds Weigh In On Gaotu Techedu

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Vanguard Group Inc. raised its stake in Gaotu Techedu by 1.2% in the 3rd quarter. Vanguard Group Inc. now owns 5,192,148 shares of the company’s stock worth $16,926,000 after acquiring an additional 63,891 shares during the last quarter. Millennium Management LLC raised its stake in Gaotu Techedu by 602.0% in the 1st quarter. Millennium Management LLC now owns 1,996,144 shares of the company’s stock worth $6,487,000 after acquiring an additional 1,711,774 shares during the last quarter. Arrowstreet Capital Limited Partnership raised its stake in Gaotu Techedu by 157.3% in the 2nd quarter. Arrowstreet Capital Limited Partnership now owns 1,568,492 shares of the company’s stock worth $5,662,000 after acquiring an additional 958,782 shares during the last quarter. Marshall Wace LLP raised its stake in shares of Gaotu Techedu by 3,628.9% during the 2nd quarter. Marshall Wace LLP now owns 788,541 shares of the company’s stock valued at $2,847,000 after buying an additional 767,394 shares during the last quarter. Finally, State Street Corp raised its stake in shares of Gaotu Techedu by 6.4% during the 4th quarter. State Street Corp now owns 418,306 shares of the company’s stock valued at $970,000 after buying an additional 25,074 shares during the last quarter. Hedge funds and other institutional investors own 48.42% of the company’s stock.

Gaotu Techedu Company Profile

Gaotu Techedu Inc (NYSE:GOTU), formerly known as GSX Techedu, is a Beijing-based provider of online education services in China. Since its founding in 2014, the company has built a technology-driven platform that delivers live, interactive tutoring sessions to students primarily in the K-12 segment. Gaotu Techedu’s rebranding in 2021 underscored its commitment to leveraging cutting-edge digital tools to expand access to quality instruction across core academic subjects.

The company’s main offerings include small-group and one-on-one classes in mathematics, Chinese, English, physics and chemistry, as well as targeted test preparation for high-stakes national and local examinations.