Gaotu Techedu (NYSE:GOTU) Stock Price Down 3.3% - Here's Why

Key Points

• Gaotu Techedu shares fell 3.3% on Thursday, trading as low as $1.59 amid heavier-than-usual volume of 500,682 shares, well above its average session volume.
• Analyst sentiment remains weak: Weiss Ratings downgraded the stock from “sell (e+)” to “sell (d-)”, and the overall consensus rating is still “Sell.”
• The company’s latest quarterly results showed $0.02 EPS and revenue of $245.04 million, topping estimates, but profitability remains pressured with a negative net margin and negative return on equity.

Gaotu Techedu Inc. (NYSE:GOTU - Get Free Report) fell 3.3% on Thursday . The company traded as low as $1.59 and last traded at $1.6050. 500,682 shares were traded during mid-day trading, an increase of 68% from the average session volume of 298,650 shares. The stock had previously closed at $1.66.

Wall Street Analyst Weigh In

Separately, Weiss Ratings upgraded Gaotu Techedu from a "sell (e+)" rating to a "sell (d-)" rating in a research report on Wednesday, July 8th. One analyst has rated the stock with a Sell rating, According to MarketBeat, the stock presently has a consensus rating of "Sell".

Gaotu Techedu Trading Down 3.3%

The stock has a market cap of $384.96 million, a P/E ratio of -6.69 and a beta of 0.63. The stock's 50-day moving average is $1.72 and its two-hundred day moving average is $1.97. The company has a debt-to-equity ratio of 0.10, a current ratio of 0.91 and a quick ratio of 0.89.

Gaotu Techedu (NYSE:GOTU - Get Free Report) last announced its quarterly earnings results on Tuesday, June 2nd. The company reported $0.02 earnings per share (EPS) for the quarter. The company had revenue of $245.04 million for the quarter, compared to the consensus estimate of $233.35 million. Gaotu Techedu had a negative net margin of 6.42% and a negative return on equity of 29.69%.

Insider Activity

In other news, CEO Xiangdong Chen bought 167,051 shares of the firm's stock in a transaction that occurred on Thursday, June 18th. The shares were bought at an average cost of $2.50 per share, for a total transaction of $417,627.50. Following the completion of the transaction, the chief executive officer owned 8,014,529 shares of the company's stock, valued at approximately $20,036,322.50. This represents a 2.13% increase in their ownership of the stock. The purchase was disclosed in a legal filing with the SEC, which is available through the SEC website. Insiders bought 500,000 shares of company stock valued at $1,175,032 over the last quarter. Insiders own 44.90% of the company's stock.

Hedge Funds Weigh In On Gaotu Techedu

Institutional investors have recently added to or reduced their stakes in the company. Millennium Management LLC increased its stake in Gaotu Techedu by 602.0% in the 1st quarter. Millennium Management LLC now owns 1,996,144 shares of the company's stock worth $6,487,000 after acquiring an additional 1,711,774 shares during the last quarter. American Century Companies Inc. grew its holdings in shares of Gaotu Techedu by 57.0% in the second quarter. American Century Companies Inc. now owns 61,076 shares of the company's stock valued at $220,000 after purchasing an additional 22,164 shares in the last quarter. Arrowstreet Capital Limited Partnership grew its holdings in shares of Gaotu Techedu by 157.3% in the second quarter. Arrowstreet Capital Limited Partnership now owns 1,568,492 shares of the company's stock valued at $5,662,000 after purchasing an additional 958,782 shares in the last quarter. Walleye Trading LLC grew its holdings in shares of Gaotu Techedu by 110.1% in the second quarter. Walleye Trading LLC now owns 21,722 shares of the company's stock valued at $78,000 after purchasing an additional 11,383 shares in the last quarter. Finally, Marshall Wace LLP increased its position in Gaotu Techedu by 3,628.9% in the second quarter. Marshall Wace LLP now owns 788,541 shares of the company's stock worth $2,847,000 after purchasing an additional 767,394 shares during the last quarter. Hedge funds and other institutional investors own 48.42% of the company's stock.

About Gaotu Techedu

Gaotu Techedu Inc NYSE: GOTU, formerly known as GSX Techedu, is a Beijing-based provider of online education services in China. Since its founding in 2014, the company has built a technology-driven platform that delivers live, interactive tutoring sessions to students primarily in the K-12 segment. Gaotu Techedu's rebranding in 2021 underscored its commitment to leveraging cutting-edge digital tools to expand access to quality instruction across core academic subjects.

The company's main offerings include small-group and one-on-one classes in mathematics, Chinese, English, physics and chemistry, as well as targeted test preparation for high-stakes national and local examinations.

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