Head to Head Survey: Gaotu Techedu (NYSE:GOTU) versus Four Seasons Education (Cayman) (NYSE:FEDU)

Four Seasons Education (Cayman) (NYSE:FEDU) and Gaotu Techedu (NYSE:GOTU) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Risk and Volatility

Four Seasons Education (Cayman) has a beta of 0.34, meaning that its share price is 66% less volatile than the S&P 500. Comparatively, Gaotu Techedu has a beta of -1.29, meaning that its share price is 229% less volatile than the S&P 500.

Valuation & Earnings

This table compares Four Seasons Education (Cayman) and Gaotu Techedu’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Four Seasons Education (Cayman) $43.30 million 0.94 -$4.36 million N/A N/A
Gaotu Techedu $1.09 billion 0.72 -$213.47 million ($0.89) -3.45

Four Seasons Education (Cayman) has higher earnings, but lower revenue than Gaotu Techedu.

Analyst Ratings

This is a summary of recent ratings and target prices for Four Seasons Education (Cayman) and Gaotu Techedu, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Four Seasons Education (Cayman) 0 0 0 0 N/A
Gaotu Techedu 4 2 0 0 1.33

Gaotu Techedu has a consensus price target of $8.16, indicating a potential upside of 164.08%. Given Gaotu Techedu’s higher possible upside, analysts plainly believe Gaotu Techedu is more favorable than Four Seasons Education (Cayman).

Institutional & Insider Ownership

2.5% of Four Seasons Education (Cayman) shares are held by institutional investors. Comparatively, 35.9% of Gaotu Techedu shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Four Seasons Education (Cayman) and Gaotu Techedu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Four Seasons Education (Cayman) -10.13% -4.25% -2.75%
Gaotu Techedu -46.71% -108.48% -49.81%

Summary

Four Seasons Education (Cayman) beats Gaotu Techedu on 6 of the 10 factors compared between the two stocks.

Four Seasons Education (Cayman) Company Profile

Four Seasons Education (Cayman), Inc. is an after-school education service provider for students in Shanghai. It unlocks students’ intellectual potential through education that can benefit students’ academic, career and life prospects. The firm provides educational programs that are primarily focused on elementary-level math, and have expanded in recent years to also include other subjects, including physics, chemistry, and languages, and other grade levels, including kindergarten-level and middle school-level programs. The company was founded by Peiqing Tian in March 2007 and is headquartered in Shanghai, China.

Gaotu Techedu Company Profile

Gaotu Techedu, Inc. is a technology-driven education company. Its core expertise is in online K-12 courses, and online K-12 large-class after-school tutoring service provider in China. The company’s K-12 courses cover all primary and secondary grades. It also offers foreign language, professional and interest courses. The company was founded by Xiang Dong Chen in June 2014 and is headquartered in Beijing, China.

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