Gaotu Techedu Inc.
GOTU Consumer Defensive Education & Training Services
Gaotu Techedu Inc.’s revenue for fiscal 2025 (year ended December 2025) was $879.0 million, up 40.9% from fiscal 2024. In the quarter to June 2026, revenue grew 26.9%, EPS grew 25.0% and free cash flow grew 129.6%, each against the same quarter a year earlier. Revenue growth for three consecutive years; insiders bought in the last twelve months.
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Gaotu Techedu Inc. (GOTU) Altman Z-score
Gaotu Techedu Inc.'s Altman Z-score for fiscal 2025 is −0.25, in the distress zone (below 1.81).
Altman Z-score, annual
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Annual newest first
| Period | Altman Z-score | Change (points) |
|---|---|---|
| FY2025 | −0.25 | 0.34 |
| FY2024 | −0.59 | (1.90) |
| FY2023 | 1.31 | 0.21 |
| FY2022 | 1.10 | 1.82 |
| FY2021 | −0.72 | (10.88) |
| FY2020 | 10.17 | (0.48) |
| FY2019 | 10.64 | — |
How fiscal 2025’s score is made up
| Component | This year | Year before | Result | Points |
|---|---|---|---|---|
| Working capital / total assets | (0.04) | — | −0.05 | |
| Retained earnings / total assets | (1.00) | — | −1.40 | |
| EBIT / total assets | (0.08) | — | −0.27 | |
| Market value of equity / total liabilities | 0.80 | — | 0.48 | |
| Sales / total assets | 0.99 | — | 0.99 | |
| Altman Z-score | Distress zone | −0.25 | ||
| Z″ Variant for non-manufacturing and asset-light companies (drops the sales/assets term, uses book equity) | Distress zone | −3.82 | ||
How the Altman Z-score works
Z = 1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets (Altman, 1968). The market value of equity is the close on the last trading day of the fiscal year times weighted basic shares.
Z″ = 6.56 × working capital ÷ total assets + 3.26 × retained earnings ÷ total assets + 6.72 × EBIT ÷ total assets + 1.05 × book equity ÷ total liabilities (Altman, Hartzell and Peck, 1995), the variant for non-manufacturing and asset-light companies.
| Zone | Z | Z″ |
|---|---|---|
| Safe zone | above 2.99 | above 2.60 |
| Grey zone | 1.81–2.99 | 1.10–2.60 |
| Distress zone | below 1.81 | below 1.10 |
Not worked out for banks, insurers and REITs, whose balance sheets the model does not describe, nor when a figure is missing or there is no share price in the week to the fiscal year end.
Altman Z-score against peers
| Company | Altman Z-score |
|---|---|
| LGCY Legacy Education Inc. compare | 5.9× |
| APEI American Public Education, Inc. compare | 3.7× |
| LINC Lincoln Educational Services Corporation compare | 3.0× |
| FC Franklin Covey Company compare | 2.6× |
| KLC KinderCare Learning Companies, Inc. compare | 0.7× |
| DAO Youdao, Inc. Unsponsored ADR compare | −0.2× |
| GOTU Gaotu Techedu Inc. | −0.2× |
| NEW Puxin Limited compare | — |
| PXED Phoenix Education Partners, Inc. compare | — |
What Altman Z-score is
The Altman Z-Score weighs working capital, retained earnings, operating profit, market value and sales against assets and debts to gauge the risk of distress.
1.2 × working capital ÷ total assets + 1.4 × retained earnings ÷ total assets + 3.3 × EBIT ÷ total assets + 0.6 × market value of equity ÷ total liabilities + 1.0 × revenue ÷ total assets