Gaotu Techedu (NYSE:GOTU) Announces Quarterly Earnings Results

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

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 Trading Down 3.2%

GOTU opened at $1.68 on Thursday. The stock has a market cap of $401.75 million, a PE ratio of -6.98 and a beta of 0.60. The company has a quick ratio of 0.92, a current ratio of 0.94 and a debt-to-equity ratio of 0.03. The business has a 50 day moving average of $1.90 and a 200-day moving average of $2.16. Gaotu Techedu has a 52 week low of $1.63 and a 52 week high of $4.13.

Wall Street Analysts Forecast Growth

Separately, Weiss Ratings upgraded Gaotu Techedu from a “sell (e+)” rating to a “sell (d-)” rating in a report on Friday, May 8th. One analyst has rated the stock with a Sell rating, According to MarketBeat, the stock has an average rating of “Sell”.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in GOTU. HRT Financial LP increased its holdings in shares of Gaotu Techedu by 86.6% in the 4th quarter. HRT Financial LP now owns 22,020 shares of the company’s stock worth $51,000 after purchasing an additional 10,221 shares in the last quarter. Walleye Trading LLC increased its holdings in shares of Gaotu Techedu by 110.1% in the 2nd quarter. Walleye Trading LLC now owns 21,722 shares of the company’s stock worth $78,000 after purchasing an additional 11,383 shares in the last quarter. Bank of America Corp DE increased its holdings in shares of Gaotu Techedu by 10.5% in the 3rd quarter. Bank of America Corp DE now owns 164,737 shares of the company’s stock worth $537,000 after purchasing an additional 15,651 shares in the last quarter. American Century Companies Inc. increased its holdings in shares of Gaotu Techedu by 57.0% in the 2nd quarter. American Century Companies Inc. now owns 61,076 shares of the company’s stock worth $220,000 after purchasing an additional 22,164 shares in the last quarter. Finally, State Street Corp increased its holdings in shares of Gaotu Techedu by 6.4% in the 4th quarter. State Street Corp now owns 418,306 shares of the company’s stock worth $970,000 after purchasing an additional 25,074 shares in the last quarter. Hedge funds and other institutional investors own 48.42% of the company’s stock.

About Gaotu Techedu

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.