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Gaotu Techedu Inc. (GOTU) vs Legacy Education Inc. (LGCY)

Gaotu Techedu Inc. and Legacy Education Inc. are both Education & Training Services companies. Gaotu Techedu Inc. is the larger, with a market value of $334.0M against $132.6M — 2.5× the size. Gaotu Techedu Inc. has negative trailing earnings, so its P/E is not meaningful; Legacy Education Inc. trades at 14.0×. Gaotu Techedu Inc. grew revenue faster over the last twelve months: 28.8% against 24.8%. Legacy Education Inc. has the higher net margin (11.4% vs −4.97%) and the higher return on invested capital (24.4% vs 0.00%). Across the 18 metrics below, Legacy Education Inc. leads on 11 and Gaotu Techedu Inc. on 7.

Valuation

Metric GOTU LGCY Education & Training Services median
P/E n/m 14.04 13.22
P/S 0.61 1.61 0.99
P/B 3.81 2.45 1.62
Price to free cash flow 9.60 48.17 10.06
EV/EBITDA n/m 8.56 8.56
EV/Sales 0.18 1.33 0.78
Earnings yield (7.95%) 7.12% 3.17%
Free cash flow yield 10.42% 2.08% 2.81%

Profitability

Metric GOTU LGCY Education & Training Services median
Gross margin 67.54% 46.39% 54.64%
Operating margin (6.60%) 14.75% 0.00%
Net margin (4.97%) 11.42% 2.98%
Free cash flow margin 0.00% 3.35% 0.00%
Return on equity (25.49%) 19.49% 0.00%
Return on assets (5.51%) 12.37% 0.00%
Return on invested capital 0.00% 24.41% 0.00%

Growth

Metric GOTU LGCY Education & Training Services median
Revenue growth (TTM) 28.79% 24.76% 6.97%
EPS growth (last fiscal year) 66.07% 11.86% 15.68%
Revenue growth, 5-year CAGR (4.25%) — 4.27%
Net income growth, 5-year CAGR 0.00% — 0.00%

Health

Metric GOTU LGCY Education & Training Services median
Debt to equity 0.51 0.00 0.05
Current ratio 0.86 3.70 1.33
Net debt to EBITDA 8.43 (1.81) (0.15)

Dividend

Metric GOTU LGCY Education & Training Services median
Dividend yield — — 1.84%
Payout ratio — — 0.23

Size

Metric GOTU LGCY Education & Training Services median
Market cap 334.02m 132.62m 68.84m

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