Critical Analysis: GSX Techedu (GSX) & Its Competitors

GSX Techedu (NYSE: GSX) is one of 49 public companies in the “Educational services” industry, but how does it contrast to its competitors? We will compare GSX Techedu to related businesses based on the strength of its risk, dividends, earnings, profitability, institutional ownership, valuation and analyst recommendations.

Profitability

This table compares GSX Techedu and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
GSX Techedu 11.62% 23.56% 10.54%
GSX Techedu Competitors 721.29% -25.86% 3.64%

Institutional and Insider Ownership

20.6% of GSX Techedu shares are owned by institutional investors. Comparatively, 51.8% of shares of all “Educational services” companies are owned by institutional investors. 4.8% of GSX Techedu shares are owned by insiders. Comparatively, 19.8% of shares of all “Educational services” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares GSX Techedu and its competitors revenue, earnings per share and valuation.

Gross Revenue Net Income Price/Earnings Ratio
GSX Techedu $303.78 million $32.56 million 326.62
GSX Techedu Competitors $560.19 million $53.22 million 43.80

GSX Techedu’s competitors have higher revenue and earnings than GSX Techedu. GSX Techedu is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for GSX Techedu and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GSX Techedu 1 0 6 0 2.71
GSX Techedu Competitors 358 1073 1191 56 2.35

GSX Techedu presently has a consensus price target of $44.83, suggesting a potential upside of 5.59%. As a group, “Educational services” companies have a potential upside of 40.33%. Given GSX Techedu’s competitors higher possible upside, analysts plainly believe GSX Techedu has less favorable growth aspects than its competitors.

Summary

GSX Techedu competitors beat GSX Techedu on 7 of the 12 factors compared.

GSX Techedu Company Profile

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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