Gaotu Techedu's profitability outlook deteriorates on increased workforce - analyst [Seeking Alpha]
Gaotu Techedu Inc. American Depositary Shares (GOTU)
Company Research
Source: Seeking Alpha
Q2 of RMB1.65 per share ($0.23) compared to a profit of RMB21 per share in the same quarter last year, missing the consensus estimate by $0.02 per share. With operating expenses up 144.2% and cost of revenue increasing by 70%, the loss comes despite a 43.6% increase in revenue and 87.4% improvement in gross billings. Ultimately, the higher costs lowered the company's adjusted gross profit margin by 530 basis points to 69.0%. The results underscore Gaotu Techedu's ( GOTU ) struggle to manage aggressive expansion with financial viability, leading Citigroup to double-downgrade the Chinese online educator to Sell from Buy, warning investors of the company's “deteriorating risk-reward profile amid escalating profitability concerns.” Citigroup's Alice Cai also slashed her target price on the company almost in half to $2.94 and “materially” lower its bottom-line estimates for FY24, FY25, and FY26 by 125%, 149% and 234%, respectively. Last January, Cai upgraded the company to Buy from
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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: Profitability Concerns Overblown, Maintaining "Buy" Rating [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.