Financial Survey: Wah Fu Education Group (NASDAQ:WAFU) & Gaotu Techedu (NYSE:GOTU)

Gaotu Techedu (NYSE:GOTU) and Wah Fu Education Group (NASDAQ:WAFU) are both small-cap business services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, risk, analyst recommendations, profitability, valuation and earnings.

Valuation & Earnings

This table compares Gaotu Techedu and Wah Fu Education Group”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gaotu Techedu	$3.51 billion	0.24	-$1.03 million	($0.08)	-40.00
Wah Fu Education Group	$7.22 million	1.11	-$60,000.00	N/A	N/A

Wah Fu Education Group has lower revenue, but higher earnings than Gaotu Techedu.

Risk and Volatility

Gaotu Techedu has a beta of -0.01, suggesting that its share price is 101% less volatile than the S&P 500. Comparatively, Wah Fu Education Group has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Profitability

This table compares Gaotu Techedu and Wah Fu Education Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gaotu Techedu	-17.63%	-20.26%	-11.51%
Wah Fu Education Group	N/A	N/A	N/A

Institutional & Insider Ownership

48.4% of Gaotu Techedu shares are owned by institutional investors. 44.9% of Gaotu Techedu shares are owned by insiders. Comparatively, 72.0% of Wah Fu Education Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Gaotu Techedu and Wah Fu Education Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gaotu Techedu	1	2	1	0	2.00
Wah Fu Education Group	0	0	0	0	N/A

Gaotu Techedu presently has a consensus target price of $7.23, indicating a potential upside of 125.94%. Given Gaotu Techedu’s higher possible upside, analysts plainly believe Gaotu Techedu is more favorable than Wah Fu Education Group.

Summary

Wah Fu Education Group beats Gaotu Techedu on 7 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 Wah Fu Education Group

Wah Fu Education Group Limited, through its subsidiaries, provides online exam preparation services and related technology solutions in the People's Republic of China. The company operates through two segments: Online Education Services, and Technological Development and Operation Services. The Online Education Services segment offers online education platforms to institutions, such as universities and training institutions, and online course development service companies. This segment provides self-study examination, continuing education, and non-diploma training platforms that allow students to enroll in courses for college credit; vocational education 1+X and higher vocational enrollment expansion teaching and educational administration platform; Huafu e-school system and paperless examination platform; and online training and examination preparation services directly to students. The Technological Development and Operation Services segment develops and maintains online education platforms and online courses for its clients, including universities and government agencies, as well as private clients, such as publishers; and provides consulting, maintenance, and updating services related to online education programs. In addition, the company produces online training course materials. Wah Fu Education Group Limited was founded in 1999 and is headquartered in Beijing, the People's Republic of China.