Strategic Education (NASDAQ:STRA) and GSX Techedu (NASDAQ:GSX) Critical Analysis

Strategic Education (NASDAQ:STRA) and GSX Techedu (NYSE:GSX) are both mid-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Strategic Education and GSX Techedu, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Strategic Education 0 0 3 1 3.25
GSX Techedu 0 0 1 0 3.00



Strategic Education currently has a consensus target price of $198.75, indicating a potential upside of 24.72%. GSX Techedu has a consensus target price of $17.00, indicating a potential upside of 31.48%. Given GSX Techedu’s higher probable upside, analysts clearly believe GSX Techedu is more favorable than Strategic Education.

Insider & Institutional Ownership

96.1% of Strategic Education shares are owned by institutional investors. Comparatively, 6.6% of GSX Techedu shares are owned by institutional investors. 3.6% of Strategic Education shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Strategic Education and GSX Techedu’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Strategic Education $634.18 million 5.52 -$15.67 million $4.75 33.55
GSX Techedu N/A N/A N/A N/A N/A

GSX Techedu has lower revenue, but higher earnings than Strategic Education.

Profitability

This table compares Strategic Education and GSX Techedu’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Strategic Education 0.62% 8.65% 7.18%
GSX Techedu N/A N/A N/A

Dividends

Strategic Education pays an annual dividend of $2.00 per share and has a dividend yield of 1.3%. GSX Techedu does not pay a dividend. Strategic Education pays out 42.1% of its earnings in the form of a dividend.

Summary

Strategic Education beats GSX Techedu on 10 of the 12 factors compared between the two stocks.

Strategic Education Company Profile

Strategic Education, Inc., through its subsidiaries, provides a range of post-secondary education and non-degree programs in the United States. The company operates through three segments: Strayer University, Capella University, and Non-Degree Programs. It operates Strayer University that provides undergraduate and graduate degree programs in business administration, accounting, information technology, education, health services administration, public administration, and criminal justice for working adult students through its 74 physical campuses located in the eastern United States, as well as through online; and an executive MBA online through its Jack Welch Management Institute. The company also operates Capella University, an online post-secondary education company, which offers various bachelor's, master's, and doctoral degree programs in public service leadership, nursing and health sciences, psychology, business and technology, counseling and human services, and education primarily for working adults. In addition, it is involved in the operation of a software development school that provides Web Development, iOS development, and UX design programs in person at classrooms in Provo and Salt Lake City, Utah; Dallas, Texas; and Phoenix, Arizona, as well as through online. Further, the company operates a software engineering school for women, which offers software development programs in person through classrooms in the San Francisco Bay area; and provides non-degree Web and application software development courses, as well as self-paced online learning courses. It offers its non-degree programs primarily for workers and their employers. Strategic Education, Inc. was founded in 1892 and is headquartered in Herndon, Virginia.

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.

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