Gaotu(US:GOTU) BOCOM International·2025-11-20 11:03Investment Rating - The report maintains a "Buy" rating for the company, with a target price of $5.20, indicating a potential upside of 113.1% from the current price of $2.44 [2][5][9]. Core Insights - The company is expected to achieve a revenue growth rate of 35% in 2025 and 20% in 2026, driven by its strong online education services and improving operational efficiency in offline business [3][4]. - The adjusted operating loss for 2025 is projected to be approximately 510 million RMB, with a turnaround expected in 2026 [3][4]. - The report highlights the importance of enhancing the efficiency of offline operations while leveraging the existing advantages in online education [3][4]. Financial Forecasts - Revenue projections for 2025 are set at 6,132 million RMB, reflecting a 34.7% growth compared to previous estimates [4]. - The gross profit for 2025 is expected to be 4,160 million RMB, with a gross margin of 67.8% [4]. - Adjusted net profit is forecasted to be a loss of 344 million RMB in 2025, improving to a profit of 194 million RMB in 2026 [4][14]. Stock Performance - The stock has shown a year-to-date increase of 11.42%, with a 52-week high of $4.04 and a low of $1.88 [7][9]. - The average trading volume is reported at 0.74 million shares per day [7]. Market Context - The report emphasizes the long-term growth potential of the K12 education sector, supported by demographic changes and the company's established online education capabilities [3][4].