Gaotu Techedu (NYSE:GOTU – Get Free Report) and Michelin (OTCMKTS:MGDDY – Get Free Report) are both consumer discretionary companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.
Risk and Volatility
Gaotu Techedu has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500. Comparatively, Michelin has a beta of 1, meaning that its share price has a similar volatility profile to the S&P 500.
Institutional and Insider Ownership
48.4% of Gaotu Techedu shares are held by institutional investors. Comparatively, 3.3% of Michelin shares are held by institutional investors. 44.9% of Gaotu Techedu shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Gaotu Techedu | $878.98 million | 0.46 | -$46.23 million | ($0.24) | -7.02 |
| Michelin | $29.40 billion | 0.94 | $1.88 billion | N/A | N/A |
Michelin has higher revenue and earnings than Gaotu Techedu.
Analyst Ratings
This is a breakdown of recent recommendations and price targets for Gaotu Techedu and Michelin, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gaotu Techedu | 1 | 0 | 0 | 0 | 1.00 |
| Michelin | 0 | 6 | 2 | 0 | 2.25 |
Profitability
This table compares Gaotu Techedu and Michelin’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% |
| Michelin | N/A | N/A | N/A |
Summary
Michelin beats Gaotu Techedu on 9 of the 11 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 Michelin
Compagnie Générale des Établissements Michelin SCA engages in the manufacture, distribution and sale of tires. Its products and services include tires, mobility services, lifestyle products, Michelin solutions and Michelin engineering and services. The company operates through the following segments: Passenger car and Light truck tires and related distribution, Truck tires and related distribution, and Specialty businesses. The company was founded by Aristide Barbier and Édouard Daubrée on July 15, 1863 and is headquartered in Clermont-Ferrand, France.
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