What Are The Risk Factors For Gaotu Techedu Inc. (GOTU)?


At the last check on Friday, Gaotu Techedu Inc.’s (NYSE:GOTU) stock was down -$0.01, moving down -0.94 percent to $1.05. The average number of shares traded per day over the past five days has been 3,624,456 shares. 1 time new highs have been achieved over the past 5 days, with a -$0.0500 fall in that time frame. In the last twenty days, the average volume was 3,341,004, while in the previous 50 days, it was 2,321,600.

Since last month, GOTU stock rose 41.15%. Shares of the company fell to $0.6402 on 11/01/22, the lowest level in the past month. A 52-week high of $2.99 was reached on 02/16/22 after having rallying from a 52-week low of $0.64. Since the beginning of this year, GOTU’s stock price has dropped by -45.36% or -$0.8900, and marked a new high 8 times. However, the stock has declined by -64.86% since its 52-week high.

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Valuation Metrics

The stock’s beta is -1.03. Besides these, the trailing price-to-sales (P/S) ratio of 0.54, the price-to-book (PB) ratio of 0.65.

Financial Health

In the three months ended December 30, Gaotu Techedu Inc.’s quick ratio stood at 3.00, while its current ratio was 3.10, showing that the company is able to pay off its debt. On the profitability front, the trailing twelve-month gross margin is 59.60% percent. In the year ended December 30, operating margins totaled -23.50%. Based on annual data, GOTU earned $653.45 million in gross profit and brought in $1.03 billion in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was -111.80%. Return on equity (ROE) for the past 12 months was -26.40%.

According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. GOTU’s revenue fell -6.04% during the quarter, while net income inched up to $1.03 billion. While analysts expected Gaotu Techedu Inc. to report $0.24 quarterly earnings, the actual figure was $0.18 per share, beating the consensus estimate by -25.00%. During the quarter, the company generated -$9.78 million in EBITDA. The liabilities of Gaotu Techedu Inc. were 195.24 million at the end of its most recent quarter ended December 30, and its total debt was $153.04 million.

Technical Picture

This quick technical analysis looks at Gaotu Techedu Inc.’s (GOTU) price momentum. With a historical volatility rate of 198.72%, the RSI 9-day stood at 59.26% on 23 November.

With respect to its five-day moving average, the current Gaotu Techedu Inc. price is down by -4.55% percent or -$0.0500. At present, GOTU shares trade +53.35% above its 20-day simple moving average and -43.55% percent below its 100-day simple moving average. However, the stock is currently trading approximately -30.46% below its SMA50 and -55.88% below its SMA200.

Stochastic coefficient K was 74.84% and Stochastic coefficient D was 76.15%, while ATR was 0.1330. Given the Stochastic reading of 73.58% for the 14-day period, the RSI (14) reading has been calculated as 55.86%. As of today, the MACD Oscillator reading stands at 0.0231, while the 14-day reading stands at 0.1353.

Analyst Ratings

CLSA upgraded its rating on Gaotu Techedu Inc. (NYSE: GOTU) to an Underperform in a note to investors on March 11, 2022. The analysts firm previously had a Sell rating on the stock.Gaotu Techedu Inc. (GOTU) has been rated Underweight by analysts. According to 0 brokerage firms, GOTU is a sell, and 0 firms recommend it is a Hold. There are 1 analyst who say the stock is underweight. A total of 0 analysts rate Gaotu Techedu Inc. stock as buy, with 0 recommending it as overweight.


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