Investment Rating - The report maintains a **Buy** rating for Gaotu Techedu (GOTU US) with a target price of **$4.60**, representing a potential upside of **76.9%** from the current price of **$2.60** [1][4] Core Views - Gaotu Techedu's business restructuring and marketing strategy adjustments are expected to show results by **2025**, with potential cost savings of **RMB 100 million** from operational efficiency improvements [1][2] - The company's **K12 business** is expected to maintain a strong growth trajectory, with **70%+ YoY growth** in Q3 2024, driven by strong demand and effective student retention strategies [1] - The **adult education segment** is undergoing strategic downsizing, with revenue expected to remain flat in Q3 2024, a downgrade from the previously expected **10%+ growth**, resulting in a **RMB 30 million reduction** in revenue [1] - The company's **K9 business** is projected to grow by **150%+** in 2024, exceeding previous expectations, while the adult education segment is expected to see a **low single-digit decline** in Q4 2024 [2] - Despite strong revenue growth, the company is expected to face **operating losses** of **RMB 1.27 billion** in 2024, with a **loss margin of 28%**, due to increased marketing expenses and ongoing business adjustments [2] Financial Performance - **Revenue** is expected to grow by **50% YoY** in 2024, reaching **RMB 4.454 billion**, driven by strong performance in the K12 and K9 segments [2][3] - **Net loss** is projected to widen to **RMB 1.075 billion** in 2024, compared to a net profit of **RMB 51 million** in 2023, due to higher operating costs and business restructuring [3] - The company's **gross margin** is expected to decline to **64%** in Q3 2024, down **8 percentage points YoY**, primarily due to the impact of reduced revenue from the adult education segment [1] - By **2025**, the company expects to achieve a **profit margin** of **10-15%**, driven by improved operational efficiency and reduced marketing expenses [2] Valuation - The target price of **$4.60** is based on a **15x P/E ratio** for the online education business, reflecting the company's expected profitability recovery by 2025 [2] - The valuation has been adjusted downward from the previous target of **$6.50** due to ongoing business restructuring and increased marketing investments [2] Market Performance - Gaotu Techedu's stock has experienced a **28.18% decline** year-to-date, with a **52-week high of $8.35** and a **52-week low of $2.35** [6] - The company's **market capitalization** stands at **$386.10 million**, with an average daily trading volume of **0.67 million shares** [6]

BEIJING, Nov. 19, 2024 /PRNewswire/ -- Gaotu Techedu Inc. ("Gaotu" or the "Company") (NYSE: GOTU), a technology-driven education company and online large-class tutoring service provider in China, today announced that it will report its financial results for the third quarter ended September 30, 2024, before U.S. markets open on Wednesday, December 4, 2024.Gaotu's management will hold an earnings conference call at 8:00 AM U.S. Eastern Time on Wednesday, December 4, 2024 (9:00 PM on the same day, Beijing/Hon ...

I published my initial investment thesis on Gaotu Techedu (NYSE: GOTU ) in September of 2023. It has been more than a year since the publication of the thesis. GOTU’s investors have gone through a roller-coaster ride since then. TheI am the co-founder and portfolio manager for a multi-family office with a focus on U.S and Asia markets. I have a bachelor's and master's degree in accounting and finance from one of the top programs in the U.S. I am a CFA Charterholder. Prior to starting on my own, I worked as ...

Investment Rating - The report assigns a "Buy" rating to the company with a target price of $5.00, indicating an upside potential of 81.6% from the last closing price of $3.05 [2][4]. Core Insights - The company reported a revenue growth of 38.7% year-on-year for FY24Q2, reaching 1.009 billion RMB, exceeding previous guidance [2]. - Non-GAAP operating loss was 453 million RMB, compared to a profit of 50 million RMB in the same period last year, indicating pressure on profitability due to increased investments [2]. - Cash reserves stood at 4.1 billion RMB with no interest-bearing debt, and comparable cash collections grew over 87% year-on-year to 1.65 billion RMB [2]. - The K9 business segment showed significant growth, accounting for over 20% of total revenue, with cash collections from new students increasing by over 200% [2]. - The company expects FY24Q3 revenue growth of 50.5%-53%, projecting revenue between 1.188 billion and 1.208 billion RMB [2]. Financial Performance Summary - FY24Q2 revenue was 1.009 billion RMB, up 38.7% year-on-year, surpassing the guidance of 908-928 million RMB [2]. - Non-GAAP operating profit for FY24Q2 was -453 million RMB, compared to a profit of 50 million RMB in the previous year [2]. - The company anticipates a deferred revenue growth of 71% year-on-year to 1.582 billion RMB for FY24Q3, which is expected to convert into revenue in the second half of FY24 [2]. - The gross margin for FY24Q1 was 69.0%, down 4.8 percentage points year-on-year, primarily due to increased costs from business expansion [2]. - The sales expense ratio increased to 82.7%, up 36.6 percentage points year-on-year, reflecting higher customer acquisition costs for the summer enrollment season [2]. Valuation and Future Outlook - The report adjusts the FY24 net profit forecast to -790 million RMB, indicating expected losses in the next 1-2 years due to significant upfront investments for expansion [2]. - The valuation is based on a discount rate of 12% and a perpetual growth rate of 3% [2]. - The company is recognized as a leading player in the domestic online education sector, actively expanding its offline teaching network with nearly 100 teaching locations nationwide [2].

Core Viewpoint - Gaotu Techedu's Q2 2024 earnings results showed strong revenue growth but significant adjusted net losses, leading to a market overreaction and a stock price decline, despite a maintained "buy" rating due to undervaluation and strong cash reserves [2][12]. Financial Performance - Net revenues increased by 43.6% year-over-year [3] - Gross billings increased by 87.4% year-over-year [3] - Non-GAAP net loss was RMB418 million, a 560% increase from the same period in 2023 [3] - Net operating cash inflow was RMB386.2 million, up 33.8% from RMB288.5 million in Q2 2023 [3] Cost Structure - Cost of revenues increased by 70.0% year-over-year, driven by workforce expansion and increased learning material costs [3] - Operating expenses rose by 144.2% to RMB1,161.1 million from RMB475.4 million in Q2 2023, primarily due to employee expansion and higher marketing expenditures [3] Market Outlook - Gaotu is preparing for strong future demand, as indicated by strategic investments in teacher recruitment and customer acquisition [4] - Non-academic tutoring business saw over 200% growth in gross billings, contributing more than 20% of total revenues for the first time [5] - Management guided for Q3 revenue growth of 50.5% to 53.0% [6] Balance Sheet and Share Repurchases - At the end of Q2, Gaotu had cash and cash equivalents totaling approximately RMB4,103 million (around $570-575 million) [8] - The company has an $80 million share repurchase authorization, with approximately $53 million remaining [8] Financial Projections and Valuation - Revenue projections for 2024 and 2025 have been increased based on management's guidance [9] - The company is applying a 1.2 times EV/Sales multiple to its 2025 estimated sales, indicating significant upside potential [11] Conclusion - Gaotu's strong revenue growth continues, but profitability is impacted by upfront spending for future demand [12] - The stock is considered undervalued with strong downside protection from its balance sheet and share repurchase program [12]

交银国际研究 公司更新 | --- | --- | --- | |-----------|------------|----------| | 收盘价 | 目标价 | 潜在涨幅 | | 美元 3.31 | 美元 6.50↓ | +96.4% | 高途 (GOTU US) 2 季度收入超预期，行业需求仍将继续拉动收入增长 2024 年 2 季度业绩：收入同比增 44%至 10 亿元（人民币，下同），高于 我们/彭博市场预期2%/3%。因收入结构变化，毛利率同比下降5个百分点 至 69%。调整后运营亏损 4.5 亿元，亏损率 45%，与我们预期基本一致。 调整后营销费用跟随强劲的收款增长和暑期获客投入同比增 158%，占收 比提升至 37%，行政费用同比增 209%，因低基数以及加速开设校区和拓 展业务导致相关人员薪酬上升，均符合我们此前预期。调整后净亏损 4.2 亿元，对比我们/彭博市场预期的 3.8 亿元亏损。 2 季度业绩要点：1）现金收款同比增 87%，高于我们预期的增速 82%， K12 占比 85%+，实现翻倍增长；2）K12 收入同比增 55%+，其中非学科三 位数增长，贡献总收入 20%+，同比提 ...

Financial Data and Key Metrics Changes - The company reported a net revenue increase of 43.6% year-over-year to RMB1.0 billion, reflecting strong growth momentum [7][19] - Gross billings grew by 87.4% year-over-year to RMB1.7 billion, exceeding market expectations [7] - Net operating cash inflow reached RMB386.2 million, with cash reserves totaling RMB4.1 billion, an increase of RMB361.3 million from the previous year [8][28] - Deferred revenue reached RMB1.6 billion, representing a 71.5% increase year-over-year, indicating strong support for future growth [8] Business Line Data and Key Metrics Changes - Learning services contributed over 95% of net revenues, with non-academic tutoring services accounting for more than 75% of total revenues, growing nearly 55% year-over-year [21][22] - New initiatives in non-academic tutoring saw triple-digit growth in both net revenues and gross billings, with gross billings from new student enrollments increasing by over 200% year-over-year [22] - Educational services for college students and adults contributed just under 20% of total revenues, growing roughly 10% year-over-year [25] Market Data and Key Metrics Changes - The company has formed strategic partnerships with over 60 leading universities across China to enhance educational offerings and support new hires [13] - The number of students admitted to top Chinese universities in 2024 increased compared to the previous year, showcasing the effectiveness of the company's educational services [16] Company Strategy and Development Direction - The company aims to refine educational offerings, improve teaching quality, and optimize the learning experience as part of its strategic priorities [11] - There is a strong focus on operational efficiency and customer acquisition, with investments in talent and resources to build proprietary channels [15] - The company is committed to its offline business strategy, recognizing the challenges and long-term investments required for successful expansion [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing operational improvements and the ability to meet market demand, with expectations for continued revenue growth in the third quarter [19][29] - The company anticipates total net revenues for Q3 2024 to be between RMB1.188 billion and RMB1.208 billion, representing a year-over-year increase of 50.5% to 53.0% [29] Other Important Information - The company has repurchased approximately 7.9 million ADS for about US$27 million under its share repurchase program, demonstrating a commitment to enhancing shareholder value [17][29] - The company is leveraging artificial intelligence to improve internal efficiencies and teaching product design, with a focus on cost reduction and operational improvements [41] Q&A Session Summary Question: Insights on offline expansion and related losses - Management highlighted significant progress in offline business expansion, exceeding initial expectations, and emphasized the importance of teacher recruitment and high-quality educational resources [33][34][36] Question: AI empowerment in education - Management discussed the application of AI in improving internal efficiencies and teaching product design, with a conservative approach to investment in this area [40][41] Question: Revenue growth breakdown for Q3 - Management provided guidance indicating that the majority of revenue growth will come from online business, with offline contributions not yet significant enough to disclose separately [46][48] Question: Drivers behind exceptional new enrollment growth - Management attributed the growth to proactive teacher recruitment and training, as well as a diversified customer acquisition strategy that effectively met market demand [52][55]

Revenue Growth - Net revenues increased by 43.6% to RMB1,009.8 million in Q2 2024 compared to RMB703.1 million in Q2 2023[2][7] - Total net revenues for Q3 2024 are expected to be between RMB1,188 million and RMB1,208 million, representing a 50.5% to 53.0% year-over-year increase[16] - Net revenues for the six months ended June 30, 2024, were RMB1,956,682 thousand, compared to RMB1,410,386 thousand for the same period in 2023[30] - Net revenues for Q2 2024 increased to RMB 1,009,797 (USD 138,953), up 43.7% from RMB 703,094 in Q2 2023[31] Gross Billings - Gross billings surged by 87.4% to RMB1,653.7 million in Q2 2024 from RMB882.3 million in Q2 2023[2][3] - Gross billings for Q2 2024 reached RMB 1,653,692 (USD 227,555), an 87.4% increase from RMB 882,325 in Q2 2023[31] - Gross billings for H1 2024 increased to RMB 2,383,052 (USD 327,919), up 67.7% from RMB 1,421,276 in H1 2023[32] Profit and Loss - Net loss was RMB429.6 million in Q2 2024, compared to a net income of RMB56.2 million in Q2 2023[2][13] - Net loss for the six months ended June 30, 2024, was RMB441,847 thousand, compared to a net income of RMB170,014 thousand for the same period in 2023[30] - Net loss for Q2 2024 was RMB 429,550 (USD 59,108), compared to a net income of RMB 56,161 in Q2 2023[34] - Net loss for H1 2024 was RMB 441,847 (USD 60,801), compared to a net income of RMB 170,014 in H1 2023[34] Gross Profit - Gross profit margin decreased to 69.0% in Q2 2024 from 73.8% in Q2 2023[9] - Gross profit for the six months ended June 30, 2024, was RMB1,371,835 thousand, compared to RMB1,066,024 thousand for the same period in 2023[30] - Gross profit for Q2 2024 was RMB 696,364 (USD 95,823), a 34.2% increase from RMB 518,714 in Q2 2023[34] - Gross profit for H1 2024 was RMB 1,371,835 (USD 188,770), a 28.7% increase from RMB 1,066,024 in H1 2023[34] Non-GAAP Metrics - Non-GAAP gross profit, non-GAAP income (loss) from operations, and non-GAAP net income (loss) exclude share-based compensation expenses, which the company believes provides meaningful supplemental information regarding its performance and liquidity[22] - Non-GAAP gross profit for Q2 2024 was RMB 696,321 (USD 95,817), up 33.3% from RMB 522,299 in Q2 2023[34] - Non-GAAP net loss for Q2 2024 was RMB 418,040 (USD 57,524), compared to a non-GAAP net income of RMB 63,159 in Q2 2023[34] - Non-GAAP gross profit for H1 2024 was RMB 1,374,113 (USD 189,083), up 28.0% from RMB 1,073,599 in H1 2023[34] Operating Expenses - Operating expenses increased by 144.2% to RMB1,161.1 million in Q2 2024 from RMB475.4 million in Q2 2023[10] Cash Flow and Liquidity - Net operating cash inflow increased by 33.8% to RMB386.2 million in Q2 2024 from RMB288.5 million in Q2 2023[2][14] - Cash and cash equivalents increased from RMB636,052 thousand as of December 31, 2023, to RMB1,414,853 thousand as of June 30, 2024[25] Deferred Revenue - Deferred revenue reached RMB1.6 billion as of June 30, 2024, a 71.5% increase from the same period last year[5] Share Repurchase - The company repurchased approximately 7.9 million ADSs for approximately US$27.0 million under its share repurchase program as of August 26, 2024[15] Currency and Geographic Focus - The company primarily conducts its business in China, with revenues predominantly denominated in RMB, and uses an exchange rate of RMB7.2672 to USD1.0000 for currency conversions[24] Assets and Liabilities - Total current assets increased from RMB3,586,707 thousand as of December 31, 2023, to RMB3,830,532 thousand as of June 30, 2024[25] - Total liabilities increased from RMB1,973,284 thousand as of December 31, 2023, to RMB2,604,074 thousand as of June 30, 2024[25] Earnings Per Share - Basic net loss per ADS for the six months ended June 30, 2024, was RMB1.71, compared to a net income per ADS of RMB0.65 for the same period in 2023[30]

BEIJING, Aug. 27, 2024 /PRNewswire/ -- Gaotu Techedu Inc. (NYSE: GOTU) ("Gaotu" or the "Company"), a technology-driven education company and online large-class tutoring service provider in China, today announced its unaudited financial results for the second quarter ended June 30, 2024.Second Quarter 2024 Highlights[1]Net revenues were RMB1,009.8 million, increased by 43.6% from RMB703.1 million in the same period of 2023.Gross billings[2] were RMB1,653.7 million, increased by 87.4% from RMB882.3 million in ...

交银国际研究 公司更新 教育 2024 年 8 月 8 日 收盘价 目标价 潜在涨幅 美元 4.56 美元 7.50↓ +64.5% 高途 (GOTU US) 2 季度收入或超预期，线下投入或有加速 2024年2季度收款/收入增速或超预期。我们预计收款16.1亿元（人民币， 下同），同比增 82%，超过我们此前预期的 15.4 亿元，与 Visible Alpha 16 亿元的一致预期基本一致，得益于：1）预计 K12 业务受暑期续报拉动增 速翻番，占比整体收款超 80%，较去年同期大幅提升；2）预计成人业务 收款增约 10%，超过我们此前预期的个位数增长，主要因考研和留学培训 表现超预期，部分抵消财经和心理相关业务收缩的负面影响。我们预计收 入 9.85 亿元，同比增 40%，较此前预期上调 6%，对比彭博预期 39%及公 司 1 季报时指引 29-32%，其中 K12/成人收入分别增 50%/10% 亏损因拉新及线下投入超此前预期。我们预计 2 季度市场营销费用跟随强 劲的收款增长及暑期获客投入上升至 8.3 亿元，占收比达 84%，对比此前 预期上调 3.5 个百分点，但拉新 ROI 仍维持在 1.4， ...