Scientific Learning (OTCMKTS:SCIL) vs. GSX Techedu (OTCMKTS:GSX) Financial Analysis

Scientific Learning (OTCMKTS:SCIL) and GSX Techedu (NYSE:GSX) are both computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, institutional ownership, earnings, valuation, dividends, analyst recommendations and risk.

Institutional and Insider Ownership

6.6% of GSX Techedu shares are owned by institutional investors. 16.1% of Scientific Learning shares are owned by company insiders. Comparatively, 4.8% of GSX Techedu shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Scientific Learning and GSX Techedu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Scientific Learning -0.77% N/A -1.48%
GSX Techedu N/A N/A N/A

Valuation & Earnings

This table compares Scientific Learning and GSX Techedu’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Scientific Learning $16.74 million 0.26 -$870,000.00 N/A N/A
GSX Techedu $59.20 million 59.99 $2.93 million N/A N/A

GSX Techedu has higher revenue and earnings than Scientific Learning.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Scientific Learning and GSX Techedu, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Scientific Learning 0 0 0 0 N/A
GSX Techedu 0 0 2 0 3.00

GSX Techedu has a consensus price target of $19.50, suggesting a potential upside of 29.14%. Given GSX Techedu’s higher possible upside, analysts plainly believe GSX Techedu is more favorable than Scientific Learning.

Summary

GSX Techedu beats Scientific Learning on 8 of the 9 factors compared between the two stocks.

About Scientific Learning

Scientific Learning Corporation, an education company, develops, distributes, and licenses technology that accelerates learning by enhancing the processing efficiency of the brain. Its flagship Fast ForWord, a Web-based product, comprises Fast ForWord Language for elementary learners and Fast ForWord Literacy for adolescent learners that build foundational reading and language skills to help districts move below grade level learners to learn in the general classroom, and Fast ForWord Reading, which builds learning capacity through developing cognitive skills using exercises focusing on phonemic awareness, phonics and decoding, spelling, vocabulary, fluency, and comprehension. The company also provides Reading Assistant that offers a one-on-one reading tutor for learners; ResultsNow!, an online hosting and support solution for its Fast ForWord and Reading Assistant products; and BrainPro services targeted at learners who are below grade level. In addition, it offers on-site product training, technical installation, implementation management, consulting, and Web-based synchronous and asynchronous professional development services; and software technical update releases, as well as extensive telephone, email, and chat support services. The company offers learning solutions primarily to educational institutions, speech and language clinics, learning centers, and parents. Scientific Learning Corporation was founded in 1995 and is headquartered in Oakland, California.

About GSX Techedu

GSX Techedu Inc. operates as an online education company in the People's Republic of China. The company provides online K-12 large-class after-school tutoring services. It offers English courses for children in kindergarten; and courses that help children in grade one through grade seven. The company also provides foreign language courses, including English, Japanese, and Korean, as well as English test preparation courses for students taking post-graduate entrance exams in China; and professional courses primarily for working adults preparing for professional qualification exams comprising teacher's qualification, the Chartered Financial Analyst designation, fund qualification, and securities qualification exams. In addition, it offers personal interest courses, such as yoga, fashion, guitar, and Chinese calligraphy. Further, the company provides other courses, including offline business consulting courses, which target principals and other officers of private education institutions who want to enhance management skills; and operate Weishi, an interactive learning platform on Weixin. As of March 31, 2019, it had 169 instructors and 522 tutors. The company was formerly known as BaiJiaHuLian Group Holdings Limited and changed its name to GSX Techedu Inc. in January 2019. GSX Techedu Inc. was founded in 2014 and is headquartered in Beijing, China. GSX Techedu Inc. is a subsidiary of Ebetter International Group Limited.

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