Contrasting Stride (NYSE:LRN) & Gaotu Techedu (NYSE:GOTU)

Stride (NYSE:LRNGet Free Report) and Gaotu Techedu (NYSE:GOTUGet Free Report) are both consumer discretionary companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, earnings, risk, valuation, institutional ownership and profitability.

Risk & Volatility

Stride has a beta of 0.26, meaning that its share price is 74% less volatile than the S&P 500. Comparatively, Gaotu Techedu has a beta of -0.26, meaning that its share price is 126% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Stride and Gaotu Techedu, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stride 0 1 4 0 2.80
Gaotu Techedu 1 2 1 0 2.00

Stride currently has a consensus price target of $71.75, indicating a potential upside of 14.83%. Gaotu Techedu has a consensus price target of $3.90, indicating a potential downside of 16.49%. Given Stride’s stronger consensus rating and higher probable upside, research analysts clearly believe Stride is more favorable than Gaotu Techedu.

Profitability

This table compares Stride and Gaotu Techedu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stride 8.80% 17.77% 9.73%
Gaotu Techedu 6.67% 5.82% 3.85%

Valuation & Earnings

This table compares Stride and Gaotu Techedu’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stride $1.84 billion 1.47 $126.87 million $3.96 15.78
Gaotu Techedu $2.83 billion 0.43 $1.91 million $0.10 46.70

Stride has higher earnings, but lower revenue than Gaotu Techedu. Stride is trading at a lower price-to-earnings ratio than Gaotu Techedu, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

98.2% of Stride shares are owned by institutional investors. Comparatively, 15.8% of Gaotu Techedu shares are owned by institutional investors. 2.8% of Stride shares are owned by insiders. Comparatively, 44.9% of Gaotu Techedu shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Stride beats Gaotu Techedu on 11 of the 14 factors compared between the two stocks.

About Stride

(Get Free Report)

Stride, Inc., a technology-based education service company, provides proprietary and third-party online curriculum, software systems, and educational services to facilitate individualized learning for students primarily in kindergarten through 12th grade (K-12) in the United States and internationally. Its technology-based products and services enable clients to attract, enroll, educate, track progress, and support students. The company offers integrated package of systems, services, products, and professional expertise to support a virtual or blended public school; individual online courses and supplemental educational products; and products and services for the general education market focused on subjects, including math, English, science, and history for kindergarten through twelfth grade students. It also provides career learning products and services that are focused on developing skills to enter in industries, including information technology, health care, and business; and focused post-secondary career learning programs, which include skills training for software engineering, healthcare, and medical fields to adult learners under Galvanize, Tech Elevator, and MedCerts brand names, as well as provides staffing and talent development services to employers. It serves public and private schools, school districts, charter boards, consumers, employers, and government agencies. The company was formerly known as K12 Inc. and changed its name to Stride, Inc. in December 2020. Stride, Inc. was founded in 2000 and is headquartered in Reston, Virginia.

About Gaotu Techedu

(Get Free Report)

Gaotu Techedu Inc., a technology-driven education company, provides online K-12 after-school tutoring services in the People's Republic of China. The company provides foreign language courses comprising English and Japanese, as well as test preparation courses for students taking language certification exams; and professional courses primarily for college students and adults preparing for professional qualification exams, such teacher's qualification, Chartered Financial Analyst designation, Certified Public Accountant designation, Certified Tax Agent designation, securities qualification exams, and other exams. It also offers admission courses for admission tests and interviews, including national graduate entrance examination, civil service examinations, and others; and consulting services. In addition, the company provides online IT education courses, such as computer programming, as well as online courses on professional computer coding; career development courses, including memory enhancement courses, leadership and management training courses, and others; and courses to prepare and pass certain language exams for study abroad, such as IELTS and TOEFL. Further, it provides non-academic tutoring and personal interest courses comprising chess learning, family relationships and education, humanities, and science courses; and designs and develops course outlines, interactive courseware, practice exercises, and lesson notes, as well as reference books, such as Chinese dictionary, dictionary of idioms, and past exam questions of college entrance examination. Additionally, the company offers smart devices; multi-function translation pen, an electronic translation pen with Chinese/English translation capabilities; and learning apps. 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, the People's Republic of China.

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