Gaotu(US:GOTU)2024-02-27 16:00Investment Rating - The investment rating for the company is "Buy" with a target price of $9.10, indicating a potential upside of 17.3% from the current price of $7.76 [1][2][11]. Core Insights - The company's Q4 performance exceeded expectations, with a revenue increase of 21% year-on-year to 760 million RMB, surpassing both the analyst and Bloomberg consensus by 5% [1]. - The growth was primarily driven by the K12 business's new customer acquisition and accelerated class renewals, while the impact from adjustments in the university and adult education segments was less than anticipated [1]. - The company has a cash reserve of 4 billion RMB as of the end of 2023, reflecting a year-on-year increase of 260 million RMB [1]. - For 2024, the company expects a revenue growth rate of 28%-31% in Q1, benefiting from the high collection growth in Q4 and the winter vacation peak season [1]. - The overall revenue forecast for 2024 is set to exceed 40%, reaching approximately 4.19 billion RMB, with significant growth expected in non-subject skills, high school, and university adult education segments [1][2]. Financial Summary - The company's revenue for 2023 is projected at approximately 2.5 billion RMB, representing a year-on-year increase of 19% [1][12]. - The adjusted net loss for Q4 was 100 million RMB, better than the expected loss of 140 million RMB [1]. - The company anticipates a net profit of 102 million RMB in 2024, with a significant increase in earnings per share (EPS) expected to reach 0.39 RMB [3][12]. - The projected revenue growth rates for 2024, 2025, and 2026 are 41.5%, 28.4%, and 18.8%, respectively [3][12]. - The company’s market capitalization is approximately 1.18 billion USD, with a year-to-date stock price increase of 114.36% [5].