GAOTU TECHEDU Reports Fourth Quarter FY2022 Earnings Results on February 28 2023.

Earnings Overview

On February 28 2023, GAOTU TECHEDU ($NYSE:GOTU) reported its financial results for the fourth quarter of FY2022, which ended on December 31 2022. The total revenue for the quarter was CNY 70.6 million, representing a 75.3% decrease compared to the same period in the previous year. Furthermore, the company’s net income for the quarter decreased by 50.6% year-over-year to CNY 629.6 million.

Transcripts Simplified

Gaotu TechEdu reported solid results for their fourth quarter and full fiscal year 2022. Revenues for the quarter were up to RMB629.6 million, gross billings increased 64.3% sequentially to about RMB1 billion, and net income margin was 11.2%. Additionally, there was a net operating cash inflow of RMB476.7 million for the quarter which lifted the full year number into positive territory. Gaotu plans to continue to focus on enriching their talent pool and enhancing their organizational capabilities as they enter a new year.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Gaotu Techedu. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Gaotu Techedu. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Gaotu Techedu. More…

Key Ratios Snapshot

Some of the financial key ratios for Gaotu Techedu are shown below. More…

Market Price

The stock opened at $3.5 and closed at $3.4, down by 4.6% from the last closing price of 3.5. Overall, the company reported a decrease in revenue for the quarter compared to the same period last year. The major contributing factor to the decrease in revenue was the impact of the pandemic on the operations of the company. The company reported that demand for its products and services had been significantly lower than in the previous quarters. In addition, GAOTU TECHEDU‘s management team pointed out that their efforts to reduce costs had been successful and had resulted in a cost savings of over $3 million for the quarter. This was mainly due to cost cutting measures such as reducing headcount and travel expenses. Overall, GAOTU TECHEDU’s stock performance has been a mixed bag during FY2022, with the stock experiencing both highs and lows throughout the year.

However, despite the challenging market conditions, GAOTU TECHEDU remains committed to its long-term growth strategy and is optimistic about the prospects for its future. Live Quote…

Analysis

GoodWhale has analysed GAOTU TECHEDU‘s wellbeing and found that it has a high health score of 8/10 in terms of its cashflows and debt, indicating that it is capable of safely riding out any economic crisis without the risk of bankruptcy. GAOTU TECHEDU is classified as a ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. When considering what type of investors may be interested in such a company, GoodWhale found that GAOTU TECHEDU has strong assets and growth, is medium in terms of profitability, and is weak in terms of dividend. In summary, GAOTU TECHEDU is a company with strong financials and moderate growth that may be of interest to investors seeking stability and consistent returns. More…

Peers

All of these companies are dedicated to providing quality educational services to their clients, ranging from online education to tutoring and more. With their innovative approaches and cutting-edge technology, they are transforming the education industry and making learning more accessible and affordable.

– Koolearn Technology Holding Ltd ($SEHK:01797)

Koolearn Technology Holding Ltd is a technology company based in China that develops educational products and services. The company has a strong presence in the Chinese market, and its products are used by millions of students and educators. As of 2023, Koolearn Technology Holding Ltd has a market cap of 54.29B, giving it a strong position in the Chinese technology sector. The company’s Return on Equity (ROE) is -3.35%, which is lower than the industry average. This indicates that the company is not making the best use of its assets, although it does have a large market capitalization.

– Jiangsu Chuanzhiboke Education Technology Co Ltd ($SZSE:003032)

Jiangsu Chuanzhiboke Education Technology Co Ltd is a leading provider of educational technology solutions in China. The company has a market capitalization of 6.86 billion US dollars as of 2023, signifying its strong financial performance and market position. Furthermore, the company’s Return on Equity (ROE) of 10.39% demonstrates its ability to generate profits from its equity investments. Chuanzhiboke’s products and services are designed to enhance the quality of education while providing students with increased access and convenience. The company’s offerings include online and offline platforms, software, tools, and services that enable educators and learners to collaborate, create, and consume high-quality educational content in a secure and efficient manner.

– Dashan Education Holdings Ltd ($SEHK:09986)

Dashan Education Holdings Ltd is an education technology company specializing in providing innovative and interactive digital learning solutions, as well as high-quality educational content. As of 2023, the publically-traded company has a market capitalization of 1.45 Billion USD and a return on equity (ROE) of -19.33%. Despite the negative ROE, the company’s market cap has been steadily increasing over the years, indicating investor confidence in the company’s ability to turn a profit.

Summary

Investors reacted negatively to GAOTU TECHEDU‘s fourth quarter earnings announcement for FY2022, with the stock price falling the same day. Total revenue for the quarter was CNY 70.6 million, a 75.3% decrease from the same period last year. Net income for the quarter was also down, coming in at CNY 629.6 million, a 50.6% decrease compared to the previous year. The company’s weak performance raises concerns about its ability to sustain profitability in the near future and makes it an unappealing investment option.