Gaotu Techedu: Profitability Concerns Overblown, Maintaining "Buy" Rating [Seeking Alpha]
Gaotu Techedu Inc. American Depositary Shares (GOTU)
Company Research
Source: Seeking Alpha
Gaotu Techedu's Q2 2024 results showed strong revenue growth but significant net losses due to upfront expenses for future demand, validating my "buy" rating. Despite a 19% stock drop post-earnings, Gaotu's cash-rich balance sheet and share repurchase program offer strong downside protection and significant upside potential. Non-academic tutoring business surged, contributing over 20% of total revenues, indicating robust future growth regardless of Chinese government policies. Management's Q3 revenue growth guidance of 50.5%-53.0% and increased financial projections for 2024 and 2025 further support Gaotu's undervaluation. Tom Werner I last wrote about Gauto Techedu in August after Chinese government issued a guideline aimed at boosting consumption and services including tutoring services. What's interesting is that GOTU's Q2 earnings results, which were released on Tuesday, August th before the bell, actually validated my thesis. However, the stock nosedived almost 19% aft
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GOTU
News
- Gaotu Techedu to Report Third Quarter 2024 Financial Results on December 4, 2024PR Newswire
- Is Gaotu Techedu Inc. (NYSE:GOTU) The Worst Chinese Stock to Buy Right Now According to Short Sellers [Yahoo! Finance]Yahoo! Finance
- Gaotu Techedu's profitability outlook deteriorates on increased workforce - analyst [Seeking Alpha]Seeking Alpha
- Gaotu Techedu Inc. (NYSE: GOTU) was downgraded by analysts at Citigroup Inc. from a "buy" rating to a "sell" rating.MarketBeat
- Gaotu Techedu Inc. (GOTU) Q2 2024 Earnings Call Transcript [Seeking Alpha]Seeking Alpha
GOTU
Analyst Actions
- 8/27/24 - Citigroup Inc.