Gaotu Techedu (NYSE:GOTU) Posts Earnings Results

Gaotu Techedu (NYSE:GOTU) issued its quarterly earnings data on Tuesday, June 2nd. The company reported $0.02 EPS for the quarter, Zacks reports. The firm had revenue of $245.04 million for the quarter, compared to analyst estimates of $233.35 million. Gaotu Techedu had a negative net margin of 6.42% and a negative return on equity of 29.69%.

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

Gaotu Techedu stock remained flat at $1.52 during midday trading on Monday. The company had a trading volume of 312,140 shares, compared to its average volume of 456,341. The firm has a market capitalization of $364.57 million, a price-to-earnings ratio of -6.35 and a beta of 0.60. The company has a debt-to-equity ratio of 0.10, a quick ratio of 0.89 and a current ratio of 0.91. The business has a 50-day simple moving average of $1.85 and a 200-day simple moving average of $2.11. Gaotu Techedu has a 12 month low of $1.40 and a 12 month high of $4.12.

Insider Transactions at Gaotu Techedu

In other Gaotu Techedu news, CEO Xiangdong Chen purchased 200,000 shares of Gaotu Techedu stock in a transaction dated Thursday, June 11th. The shares were acquired at an average price of $2.23 per share, with a total value of $446,000.00. Following the completion of the transaction, the chief executive officer owned 7,714,529 shares of the company’s stock, valued at $17,203,399.67. This trade represents a 2.66% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. 44.90% of the stock is owned by company insiders.

Institutional Investors Weigh In On Gaotu Techedu

Several large investors have recently added to or reduced their stakes in the business. Millennium Management LLC boosted its position in Gaotu Techedu by 602.0% in the 1st quarter. Millennium Management LLC now owns 1,996,144 shares of the company’s stock valued at $6,487,000 after buying an additional 1,711,774 shares during the period. American Century Companies Inc. increased its position in shares of Gaotu Techedu by 57.0% during the second quarter. American Century Companies Inc. now owns 61,076 shares of the company’s stock worth $220,000 after acquiring an additional 22,164 shares during the period. Arrowstreet Capital Limited Partnership increased its position in shares of Gaotu Techedu by 157.3% during the second 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 period. Walleye Trading LLC raised its stake in shares of Gaotu Techedu by 110.1% in the second quarter. Walleye Trading LLC now owns 21,722 shares of the company’s stock valued at $78,000 after acquiring an additional 11,383 shares in the last quarter. Finally, Marshall Wace LLP boosted its holdings in Gaotu Techedu by 3,628.9% in the second quarter. Marshall Wace LLP now owns 788,541 shares of the company’s stock valued at $2,847,000 after purchasing an additional 767,394 shares during the period. 48.42% of the stock is owned by hedge funds and other institutional investors.

Wall Street Analysts Forecast Growth

Separately, Weiss Ratings lowered Gaotu Techedu from a “sell (d-)” rating to a “sell (e+)” rating in a research report on Thursday. One research analyst has rated the stock with a Sell rating, Based on data from MarketBeat.com, the company currently has an average rating of “Sell”.

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.