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Highlights
- Gaotu Techedu Inc. (NYSE:GOTU) revenue grew by 35.3% YoY in Q2, 2021. The stock jumped around 26% on Wednesday.
- New Oriental Education & Technology Group, Inc. (NYSE:EDU) rose about 5%. It has a P/E ratio of 8.29.
- GOTU stock fell 94% and EDU fell 89.29% YTD.
Stocks of Gaotu Techedu Inc. (NYSE:GOTU) and New Oriental Education & Technology Group, Inc. (NYSE:EDU) rose more than 26% and 4%, respectively, in intraday trading on Wednesday.
GOTU closed at US$3.10, up 26.02%, and EDU closed at US$1.99, up 4.74%, at 4:00 pm ET. However, GOTU waded into the red zone in the after-hours trading session.
Gaotu Techedu Inc.
This Beijing-based education technology company provides online courses for K-12. It covers primary to secondary grades. It also offers foreign language and professional courses.
Its 52-week highest and lowest stock prices were US$149.05 and US$2.25, respectively. The stock saw high trading volume following its quarterly results on Wednesday.
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The company earned revenue of RMB2,232.3 million in the second quarter ended June 30, 2021, reflecting an increase of 35.3% YoY. It booked a net loss of RMB918.8 million compared to the net income of RMB18.6 million in the corresponding period of 2020.
GOTU’s gross profit increased by 16.9% to RMB1,508.0 million against RMB1,289.7 million in Q2 of 2020. However, its gross profit margin declined to 67.6% from 78.1% in Q2, 2020.
The cash and cash equivalents, restricted cash, short-term investments, and long-term investments were RMB5,486.9 million in the aggregate, as of June 30, 2021.
The company has a market capitalization of US$792 million.
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Source – pixabay
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New Oriental Education & Technology Group, Inc.
It is one of the largest private education service providers based in Beijing. The company offers various courses, including foreign language training, after-school tutoring, primary and secondary school education, etc.
Its 52-week highest and lowest stock prices were US$19.97 and US$1.68, respectively.
The government’s recent clampdown on tech companies has increased the volatility of some Chinese stocks. It may have a long-term impact on their bottom-line growth and overall performance if regulatory pressures remain.
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The stock saw increased trading volume on Wednesday for no apparent reason. The company’s revenue rose to US$1,190.5 million, up 29.0% YoY, in the third quarter of fiscal 2021. At the same time, its net income increased by 9.9% YoY to US$151.3 million in the same period.
The company has a market capitalization of US$3.39 billion and a P/E ratio of 8.29.
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Bottomline
Early this month, the government had asked the education companies to change their status from “for-profit” to “non-profit” organizations by the end of 2021. Education stocks were hit hard after the order. However, investors should carefully evaluate the stocks before investing.
