Gaotu Techedu Inc. [NYSE: GOTU] jumped around 0.62 points on Tuesday, while shares priced at $3.71 at the close of the session, up 20.06%. The company report on July 26, 2021 that Gaotu Techedu Inc. Provides Update on New Regulations.
Gaotu Techedu Inc. (“Gaotu” or the “Company”) (NYSE: GOTU), a leading online large-class after-school tutoring service provider in China, announced that, on July 24, 2021, China’s official state media, including Xinhua News Agency and China Central Television, announced the Opinions on Further Alleviating the Burden of Homework and After-School Tutoring for Students in Compulsory Education (the “Opinion”), issued by the General Office of the CPC Central Committee and the General Office of the State Council. The Opinion contains high-level policy directives about requirements and restrictions related to online and offline after-school tutoring services, including, among others, (i) institutions providing after-school tutoring services on academic subjects in China’s compulsory education system, or Academic AST Institutions, need to be registered as non-profit; (ii) changing the current registration-based regime for operating online Academic AST Institutions to a government approval-based regime, (iii) foreign ownership in Academic AST Institutions is prohibited, including through contractual arrangements, and companies with existing foreign ownership need to rectify the situation; (iv) listed companies are prohibited from raising capital to invest in businesses that teach academic subjects in compulsory education; (v) Academic AST Institutions are prohibited from providing tutoring services on academic subjects in compulsory education during public holidays, weekends and school breaks; and (vi) Academic AST Institutions must follow the fee standards to be established by relevant authorities. The Opinion also provides that institutions providing after-school tutoring services on academic subjects in high schools (which do not fall within China’s compulsory education system) shall take into consideration the Opinion when conducting activities.
The Company will continue to comply with all applicable rules and regulations in providing educational services, including those rules and regulations to be adopted following the policy directives of the Opinion. The Company is carefully considering the provisions of the Opinion and assessing their implications for the Company’s business. The Company expects the Opinion, related rules and regulations, and the compliance measures to be taken by the Company will have material adverse impact on its after-school tutoring services related to academic subjects in China’s compulsory education system, which in turn may adversely affect the Company’s results of operations and prospect. The Company will proactively seek guidance from and cooperate with government authorities in connection with its efforts to comply with the Opinion and any related rules and regulations.
Gaotu Techedu Inc. stock is now -92.83% down from its year-to-date (YTD) trading value. GOTU Stock saw the intraday high of $3.84 and lowest of $2.89 per share. The company’s 52-week high price is 149.05, which means current price is +54.58% above from all time high which was touched on 01/27/21.
Compared to the average trading volume of 11.90M shares, GOTU reached a trading volume of 21625701 in the most recent trading day, which is why market watchdogs consider the stock to be active.
What do top market gurus say about Gaotu Techedu Inc. [GOTU]?
Goldman have made an estimate for Gaotu Techedu Inc. shares, keeping their opinion on the stock as Sell, with their previous recommendation back on July 26, 2021. While these analysts kept the previous recommendation, CLSA raised their target price from $19 to $2.70. The new note on the price target was released on July 26, 2021, representing the official price target for Gaotu Techedu Inc. stock. Previously, the target price had yet another drop from $37 to $3.50, while JP Morgan kept a Underweight rating on GOTU stock.
The Average True Range (ATR) for Gaotu Techedu Inc. is set at 1.16, with the Price to Sales ratio for GOTU stock in the period of the last 12 months amounting to 0.82. The Price to Book ratio for the last quarter was 1.40, with the Price to Cash per share for the same quarter was set at 3.12.
How has GOTU stock performed recently?
Gaotu Techedu Inc. [GOTU] gain into the green zone at the end of the last week, gaining into a positive trend and gaining by 28.37. With this latest performance, GOTU shares dropped by -71.87% in over the last four-week period, additionally sinking by -95.55% over the last 6 months – not to mention a drop of -96.19% in the past year of trading.
Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for GOTU stock in for the last two-week period is set at 26.54, with the RSI for the last a single of trading hit 26.70, and the three-weeks RSI is set at 28.17 for Gaotu Techedu Inc. [GOTU]. The present Moving Average for the last 50 days of trading for this stock 12.56, while it was recorded at 3.39 for the last single week of trading, and 50.48 for the last 200 days.
Gaotu Techedu Inc. [GOTU]: Deeper insight into the fundamentals
Operating Margin for any stock indicates how profitable investing would be, and Gaotu Techedu Inc. [GOTU] shares currently have an operating margin of -24.63 and a Gross Margin at +75.26. Gaotu Techedu Inc.’s Net Margin is presently recorded at -19.55.
Return on Total Capital for GOTU is now -40.42, given the latest momentum, and Return on Invested Capital for the company is -32.92. Return on Equity for this stock declined to -36.70, with Return on Assets sitting at -19.03. When it comes to the capital structure of this company, Gaotu Techedu Inc. [GOTU] has a Total Debt to Total Equity ratio set at 13.91. Additionally, GOTU Total Debt to Total Capital is recorded at 12.21, with Total Debt to Total Assets ending up at 7.46. Long-Term Debt to Equity for the company is recorded at 11.24, with the Long-Term Debt to Total Capital now at 9.87.
Reflecting on the efficiency of the workforce at the company, Gaotu Techedu Inc. [GOTU] managed to generate an average of -$8,941 per employee. Receivables Turnover for the company is 100.11 with a Total Asset Turnover recorded at a value of 0.97.Gaotu Techedu Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 1.80 and a Current Ratio set at 1.80.
Earnings analysis for Gaotu Techedu Inc. [GOTU]
The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for GOTU. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Gaotu Techedu Inc. go to 16.03%.
Insider trade positions for Gaotu Techedu Inc. [GOTU]
Positions in Gaotu Techedu Inc. stocks held by institutional investors increased at the end of August and at the time of the August reporting period, where 109 institutional holders increased their position in Gaotu Techedu Inc. [NYSE:GOTU] by around 32,096,422 shares. Additionally, 71 investors decreased positions by around 42,987,736 shares, while 12 investors held positions by with 20,608,159 shares. The mentioned changes placed institutional holdings at 95,692,317 shares, according to the latest SEC report filing. GOTU stock had 54 new institutional investments in for a total of 12,636,971 shares, while 22 institutional investors sold positions of 4,036,776 shares during the same period.