GSX Techedu (NYSE:GSX) and Chegg (NYSE:CHGG) are both mid-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, profitability, analyst recommendations, earnings, valuation and risk.
Valuation and Earnings
This table compares GSX Techedu and Chegg’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Chegg||$321.08 million||14.92||-$14.89 million||$0.09||445.00|
This table compares GSX Techedu and Chegg’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
1.3% of GSX Techedu shares are owned by institutional investors. 4.8% of GSX Techedu shares are owned by company insiders. Comparatively, 5.8% of Chegg shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
This is a summary of recent ratings and price targets for GSX Techedu and Chegg, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
GSX Techedu presently has a consensus price target of $13.00, indicating a potential downside of 4.20%. Chegg has a consensus price target of $43.80, indicating a potential upside of 9.36%. Given Chegg’s higher probable upside, analysts clearly believe Chegg is more favorable than GSX Techedu.
Chegg beats GSX Techedu on 6 of the 9 factors compared between the two stocks.
GSX Techedu Company Profile
GSX Techedu Inc. operates as an online education company in the People's Republic of China. The company provides online K-12 large-class after-school tutoring services. It offers English courses for children in kindergarten; and courses that help children in grade one through grade seven. The company also provides foreign language courses, including English, Japanese, and Korean, as well as English test preparation courses for students taking post-graduate entrance exams in China; and professional courses primarily for working adults preparing for professional qualification exams comprising teacher's qualification, the Chartered Financial Analyst designation, fund qualification, and securities qualification exams. In addition, it offers personal interest courses, such as yoga, fashion, guitar, and Chinese calligraphy. Further, the company provides other courses, including offline business consulting courses, which target principals and other officers of private education institutions who want to enhance management skills; and operate Weishi, an interactive learning platform on Weixin. As of March 31, 2019, it had 169 instructors and 522 tutors. The company was formerly known as BaiJiaHuLian Group Holdings Limited and changed its name to GSX Techedu Inc. in January 2019. GSX Techedu Inc. was founded in 2014 and is headquartered in Beijing, China. GSX Techedu Inc. is a subsidiary of Ebetter International Group Limited.
Chegg Company Profile
Chegg, Inc. operates direct-to-student learning platform that supports students on their journey from high school to college and into their career with tools designed to help them pass their test, pass their class, and save money on required materials. The company offers Chegg Services, which include digital products and services; and required materials that comprise its print textbooks and eTextbooks. Its digital products and services include Chegg Study, which helps students master challenging concepts on their own; Chegg Writing that enables automatically generate sources in the required formats, when students need to cite their sources in written work; Chegg Tutors that allow students find human help on its learning platform through a network of live tutors; and Chegg Math solver, which helps students to get math help through self-guided and individualized math solutions The company also offers Other Services, such as Test Prep, internships, college admission and scholarship services; rents and sells print textbooks and eTextbooks; and offers supplemental materials and textbook buyback services. Chegg, Inc. was founded in 2003 and is headquartered in Santa Clara, California.
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