Gaotu Techedu (NYSE:GOTU – Get Free Report) and Japan Tob (OTCMKTS:JAPAY – Get Free Report) are both consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.
Valuation and Earnings
This table compares Gaotu Techedu and Japan Tob”s gross revenue, earnings per share 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 |
| Japan Tob | $23.20 billion | 3.39 | $3.42 billion | $1.37 | 16.16 |
Profitability
This table compares Gaotu Techedu and Japan Tob’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% |
| Japan Tob | N/A | N/A | N/A |
Insider and Institutional Ownership
48.4% of Gaotu Techedu shares are held by institutional investors. 44.9% of Gaotu Techedu shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Risk and Volatility
Gaotu Techedu has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500. Comparatively, Japan Tob has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings and recommmendations for Gaotu Techedu and Japan Tob, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Gaotu Techedu | 1 | 0 | 0 | 0 | 1.00 |
| Japan Tob | 1 | 1 | 1 | 0 | 2.00 |
Japan Tob has a consensus price target of $17.00, indicating a potential downside of 23.22%. Given Japan Tob’s stronger consensus rating and higher possible upside, analysts clearly believe Japan Tob is more favorable than Gaotu Techedu.
Summary
Japan Tob beats Gaotu Techedu on 11 of the 14 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 Japan Tob
Japan Tobacco Inc., a tobacco company, manufactures and sells tobacco products, pharmaceuticals, and processed foods in Japan and internationally. The company operates through three segments: Tobacco Business, Pharmaceutical, and Processed Food. It offers tobacco products, such as cigarettes, heat-not-burn tobacco products, E-vapor products, fine cut tobacco products, cigars, pipes, smokeless tobacco products, and hookah and kretek products. The company also provides reduced-risk products, including infused tobacco capsules and heated tobacco sticks. In addition, it researches and develops, manufactures, and sells prescription drugs for the therapeutic areas, such as cardiovascular, kidney and metabolism, immunity/inflammation, and central nervous system. Further, the company provides frozen and room-temperature products, such as frozen udon noodles, packed rice, and frozen okonomiyaki; bakery products; and seasonings, including yeast extracts, assembled, kelp and bonito extracts, and oyster sauces. It offers its products under the Winston, Camel, MEVIUS, and LD brands. Japan Tobacco Inc. was incorporated in 1985 and is headquartered in Tokyo, Japan.
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