Lixiang Education (NASDAQ:LXEH) vs. Gaotu Techedu (NYSE:GOTU) Financial Analysis

Gaotu Techedu (NYSE:GOTU) and Lixiang Education (NASDAQ:LXEH) are both small-cap consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, institutional ownership, risk, earnings, analyst recommendations, dividends and profitability.

Insider and Institutional Ownership

48.4% of Gaotu Techedu shares are held by institutional investors. Comparatively, 0.5% of Lixiang Education shares are held by institutional investors. 44.9% of Gaotu Techedu shares are held by company insiders. Comparatively, 75.0% of Lixiang Education shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Gaotu Techedu has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Lixiang Education has a beta of -0.25, indicating that its share price is 125% less volatile than the S&P 500.

Profitability

This table compares Gaotu Techedu and Lixiang Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gaotu Techedu	-6.42%	-29.69%	-7.18%
Lixiang Education	N/A	N/A	N/A

Earnings & Valuation

This table compares Gaotu Techedu and Lixiang Education”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gaotu Techedu	$878.98 million	0.48	-$46.23 million	($0.24)	-7.35
Lixiang Education	$4.41 million	0.04	-$17.43 million	N/A	N/A

Lixiang Education has lower revenue, but higher earnings than Gaotu Techedu.

Analyst Ratings

This is a breakdown of recent ratings for Gaotu Techedu and Lixiang Education, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gaotu Techedu	1	0	0	0	1.00
Lixiang Education	1	0	0	0	1.00

Summary

Lixiang Education beats Gaotu Techedu on 5 of the 9 factors compared between the two stocks.

About Gaotu Techedu

Gaotu Techedu Inc., a technology-driven education company, provides learning services, educational content, and digitalized learning products in the People's Republic of China. The company offers traditional online academic subject tutoring services that covers academic subjects, such as mathematics, English, Chinese, physics, chemistry, biology, history, geography, and political science for students; non-academic tutoring services; personal interest courses comprising chess learning, family relationships and education, humanities, and science courses; and professional courses primarily for college students and adults preparing for professional qualification exams, such as teacher's qualification, Chartered Financial Analyst designation, Certified Public Accountant designation, and other exams. It also offers admission courses for admission tests and interviews, including national-post graduate entrance examination, civil service examinations, and others; foreign language courses; overseas study related services; and courses to prepare and pass certain language exams for study abroad, such as IELTS and TOEFL. In addition, the company designs and develops course outlines, interactive courseware, practice exercises, and lesson notes; publishes reference books comprising Chinese dictionary, dictionary of idioms, and past exam questions for the college entrance examination; and develops, expands, and upgrades education-centric digital products and solutions, as well as learning apps. Further, it offers books and digitalized auxiliary learning tools, such as smart devices and translation pens; and online tutoring services. The company was formerly known as GSX Techedu Inc. and changed its name to Gaotu Techedu Inc. in June 2021. Gaotu Techedu Inc. was incorporated in 2014 and is headquartered in Beijing, China.

About Lixiang Education

Lixiang Education Holding Co., Ltd. provides primary and middle school education services from grade 1 to grade 9 in the People's Republic of China. As of December 31, 2020, the company operated two campuses, including Baiyun Campus and Yijing Campus. It also engages in the operation of food procurement. The company was formerly known as Lianwai Education Group Limited and changed its name to Lixiang Education Holding Co., Ltd. in May 26, 2020. The company was founded in 2001 and is headquartered in Lishui, the People's Republic of China.