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 $304.0M against $120.8M — 2.5× the size. Gaotu Techedu Inc. has negative trailing earnings, so its P/E is not meaningful; Legacy Education Inc. trades at 13.9×. Legacy Education Inc. grew revenue faster over the last twelve months: 32.1% against 28.8%. Legacy Education Inc. has the higher net margin (10.9% vs −4.97%) and the higher return on invested capital (24.5% vs 0.00%). Across the 18 metrics below, Legacy Education Inc. leads on 12 and Gaotu Techedu Inc. on 6.

Valuation

Metric GOTU LGCY Education & Training Services median
P/E n/m 13.90 11.19
P/S 0.56 1.53 0.92
P/B 3.55 2.41 1.63
Price to free cash flow 7.47 25.11 9.62
EV/EBITDA n/m 8.35 7.02
EV/Sales 0.14 1.26 0.82
Earnings yield (8.54%) 7.20% 3.17%
Free cash flow yield 13.39% 3.98% 2.30%

Profitability

Metric GOTU LGCY Education & Training Services median
Gross margin 67.54% 47.24% 54.64%
Operating margin (6.60%) 14.36% 0.00%
Net margin (4.97%) 10.89% 3.29%
Free cash flow margin 0.00% 6.10% 0.00%
Return on equity (25.49%) 19.11% 0.00%
Return on assets (5.51%) 11.91% 0.00%
Return on invested capital 0.00% 24.48% 0.00%

Growth

Metric GOTU LGCY Education & Training Services median
Revenue growth (TTM) 28.79% 32.10% 6.97%
EPS growth (last fiscal year) 66.07% 11.32% —
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 0.01 0.08
Current ratio 0.86 3.36 1.33
Net debt to EBITDA 8.43 (1.80) (0.15)

Dividend

Metric GOTU LGCY Education & Training Services median
Dividend yield — — 1.13%
Payout ratio 0.00 — 0.00

Size

Metric GOTU LGCY Education & Training Services median
Market cap 303.99m 120.81m 68.93m

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