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Gaotu Techedu
(NYSE:GOTU)
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Rating:57Neutral
Price Target:
$2.00
▲(15.61% Upside)
Action:Reiterated
Date:08/27/26
The score is primarily supported by improving financial momentum and solid cash generation, reinforced by constructive revenue guidance and strong liquidity discussed on the earnings call. This is tempered by continued net losses and margin pressure (notably high selling expenses), while technical signals are mixed/neutral and valuation is constrained by a negative P/E.
Positive Factors
Diversified Revenue Growth
Growth across non-academic, online one-on-one, and adult and civil-service offerings broadens demand sources and supports scale. Continued double-digit guidance suggests the rebound is extending beyond a single quarter, improving revenue visibility over the next 2–6 months.
Negative Factors
Persistent Losses and High Customer Acquisition Costs
Gaotu remains loss-making on both GAAP and non-GAAP measures despite improving operating leverage. Selling expenses consume more than half of revenue, indicating that customer acquisition and retention costs could continue limiting margin expansion and delaying sustainable profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Diversified Revenue Growth
Growth across non-academic, online one-on-one, and adult and civil-service offerings broadens demand sources and supports scale. Continued double-digit guidance suggests the rebound is extending beyond a single quarter, improving revenue visibility over the next 2–6 months.
Read all positive factors
Gaotu Techedu (GOTU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$441.90M
Dividend YieldN/A
Average Volume (3M)400.43K
Price to Earnings (P/E)―
Beta (1Y)0.85
Revenue Growth24.86%
EPS Growth48.69%
CountryUS
Employees17,483
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)-1.12
Shares Outstanding128,495,200
10 Day Avg. Volume439,727
30 Day Avg. Volume400,427
Financial Highlights & Ratios
PEG Ratio0.28
Price to Book (P/B)4.75
Price to Sales (P/S)0.97
P/FCF Ratio24.14
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda>-0.01
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)0.08
Revenue Forecast (FY)$7.05B
Gaotu Techedu Business Overview & Revenue Model
Company Description
Gaotu Techedu Inc. operates as a tech-focused educational enterprise, delivering online K-12 supplementary instruction across the People's Republic of China. Its curriculum for students from kindergarten through twelfth grade encompasses a broad s...
How the Company Makes Money
Gaotu primarily makes money by charging learners for education services delivered through its online platforms. Its main revenue stream is tuition and service fees from paid courses and learning programs (e.g., academic tutoring and other learning...
Gaotu Techedu Earnings Call Summary
Earnings Call Date:Aug 27, 2026
(Q2-2026)
| Next Earnings Date:Nov 25, 2026
Earnings Call Sentiment Positive
The call conveyed a cautiously positive tone: strong top-line growth (net revenues +20.2%; gross billings +19.4%), robust cash flow improvement (+46.3% operating cash inflow) and meaningful AI-driven productivity gains underpin solid operational progress. Several segments—non-academic tutoring, online one-on-one, college/adult services and offline Dream Centers—showed notable expansion and improved unit economics. However, the company remains unprofitable on both GAAP and non-GAAP bases, with sizable selling expenses (54.7% of revenues) and front-loaded offline investments that require time to convert into consistent profitability. Management emphasized disciplined, selective expansion and resource allocation. Overall, highlights materially outweigh lowlights, but persistent losses and high acquisition spend warrant continued monitoring.Positive Updates
Revenue and Billings Growth
Net revenues increased 20.2% year-over-year to nearly CNY 1.7 billion, while gross billings grew 19.4% year-over-year to approximately CNY 2.7 billion, demonstrating strong top-line momentum.
Negative Updates
Continued GAAP and Non-GAAP Losses
Loss from operations was CNY 149.8 million (operating loss margin 9.0%). Net loss was CNY 135.8 million (net loss margin 8.1%); non-GAAP net loss was CNY 129.1 million (non-GAAP net loss margin 7.7%), indicating the company remains unprofitable on both GAAP and non-GAAP bases despite improvement.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Billings Growth
Net revenues increased 20.2% year-over-year to nearly CNY 1.7 billion, while gross billings grew 19.4% year-over-year to approximately CNY 2.7 billion, demonstrating strong top-line momentum.
Read all positive updates
Company Guidance
Guidance: Gaotu expects third-quarter 2026 net revenues of RMB 1,838–1,858 million, an increase of 16.4%–17.7% year‑over‑year. Management framed this outlook against solid second‑quarter results—Q2 net revenues of ~RMB 1.7 billion (+20.2% YoY), gross billings of ~RMB 2.7 billion (+19.4% YoY), gross profit >RMB 1.1 billion (+21.2%) and a 66.7% gross margin—with cost of revenue RMB 559.2 million and total operating expenses near RMB 1.3 billion (+8.8% YoY). Q2 metrics supporting the guidance also included selling expenses RMB 913.2 million (54.7% of revenues), R&D RMB 154.8 million (9.3%), G&A RMB 192.6 million (11.5%), operating loss RMB 149.8 million (‑9.0% margin), non‑GAAP operating loss RMB 143.0 million (‑8.6%), net loss RMB 135.8 million (‑8.1%) and non‑GAAP net loss RMB 129.1 million (‑7.7%). Management highlighted cash strength and recurring revenue as further support: net operating cash inflow RMB 861.2 million (+46.3% YoY), total cash and investments ~RMB 4.0 billion (cash/restricted cash RMB 929.6 million; short‑term investments RMB 2.4 billion; long‑term investments RMB 642.9 million), deferred revenue RMB 2.6 billion (+18.9% YoY), and an ongoing share‑repurchase program (nearly 36.5 million ADSs repurchased for RMB 741.8 million as of Aug 26, 2026). Operational levers cited to drive the guided growth include continued focus on profitable expansion (selective offline rollout), AI integration (curriculum development efficiency improved 5–8x in some scenarios), higher retention (online spring enrollments +>5 ppt), faster new tutor ramp (>20% productivity improvement YoY) and segment momentum (non‑academic tutoring revenue +30% YoY and >40% of total revenues; online one‑on‑one new‑enrollment billings +55% YoY; college/adult and civil service combined revenue and billings +>40% YoY).Gaotu Techedu Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
63
Positive
Cash Flow
71
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.33B | 6.15B | 4.55B | 2.96B | 2.50B | 6.56B |
| Gross Profit | 4.27B | 4.15B | 3.10B | 2.17B | 1.80B | 4.16B |
| EBITDA | -304.77M | -214.57M | -975.35M | 57.60M | 68.22M | -2.83B |
| Net Income | -413.00M | -323.31M | -1.05B | -7.30M | 13.17M | -3.10B |
Balance Sheet | ||||||
| Total Assets | 5.51B | 6.20B | 5.83B | 5.41B | 4.88B | 5.02B |
| Cash, Cash Equivalents and Short-Term Investments | 2.73B | 3.42B | 3.17B | 2.89B | 3.74B | 3.50B |
| Total Debt | 860.72M | 585.67M | 492.24M | 188.15M | 82.52M | 356.05M |
| Total Liabilities | 4.28B | 4.95B | 3.89B | 2.31B | 1.78B | 2.14B |
| Stockholders Equity | 1.23B | 1.25B | 1.93B | 3.11B | 3.10B | 2.88B |
Cash Flow | ||||||
| Free Cash Flow | 246.59M | 246.59M | 79.79M | 312.90M | 243.88M | -4.46B |
| Operating Cash Flow | 416.09M | 416.09M | 258.01M | 353.70M | 373.74M | -4.19B |
| Investing Cash Flow | -818.78M | -818.78M | 620.82M | -423.98M | -1.09B | 4.81B |
| Financing Cash Flow | -214.14M | -214.14M | -205.30M | -90.48M | 0.00 | -100.61M |
Gaotu Techedu Technical Analysis
Positive
1.73
Price Trends
1.74
Positive
1.78
Positive
2.03
Negative
Market Momentum
<0.01
Negative
64.35
Neutral
84.11
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GOTU, the sentiment is Positive. The current price of 1.73 is below the 20-day moving average (MA) of 1.77, below the 50-day MA of 1.74, and below the 200-day MA of 2.03, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 64.35 is Neutral, neither overbought nor oversold. The STOCH value of 84.11 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GOTU.
Gaotu Techedu Risk Analysis
Gaotu Techedu disclosed 77 risk factors in its most recent earnings report. Gaotu Techedu reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Gaotu Techedu Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $5.75B | 2.41 | 24.59% | ― | 32.55% | 846.04% | |
71 Outperform | $37.29M | 0.81 | 32.87% | ― | -5.26% | -3.04% | |
63 Neutral | $1.71B | -9.08 | -17.74% | ― | 22.69% | -112.56% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
57 Neutral | $441.90M | -13.84 | -30.05% | ― | 24.86% | 48.69% | |
50 Neutral | $2.01B | 82.89 | -8.24% | ― | 10.03% | -27.61% |
* Consumer Defensive Sector Average
GOTU
Gaotu Techedu
1.88
-1.90
-50.26%
TAL
TAL Education Group
11.94
1.44
13.71%
STG
Sunlands Online Education Group
2.92
-6.42
-68.74%
DAO
Youdao
16.65
8.20
97.04%
COUR
Coursera
6.47
-4.58
-41.45%
Gaotu Techedu Corporate Events
Gaotu Techedu Posts Strong Q2 2026 Revenue Growth as Losses Narrow
Aug 27, 2026
Gaotu Techedu reported unaudited second-quarter 2026 results on August 27, 2026, showing net revenues up 20.2% year over year to RMB1.67 billion and gross billings up 19.4%, supported by strong market demand for its AI-enhanced educational offerin...
Gaotu Techedu Posts Q1 2026 Revenue Growth but Profit Decline as Costs and Cash Outflows Rise
Jun 2, 2026
On June 2, 2026, Gaotu Techedu reported unaudited financial results for the first quarter ended March 31, 2026, showing net revenues of RMB1.69 billion, up 13.2% year over year, and gross billings of RMB996.3 million, up 12.1%. Despite this top-li...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.