Head-To-Head Contrast: Everybody Loves Languages (OTCMKTS:LMDCF) versus Gaotu Techedu (NYSE:GOTU)

Everybody Loves Languages (OTCMKTS:LMDCF) and Gaotu Techedu (NYSE:GOTU) are both small-cap consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Institutional and Insider Ownership

15.8% of Gaotu Techedu shares are owned by institutional investors. 44.9% of Gaotu Techedu shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Everybody Loves Languages and Gaotu Techedu’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Everybody Loves Languages	-11.18%	-4.12%	-3.47%
Gaotu Techedu	6.89%	5.74%	3.81%

Valuation & Earnings

This table compares Everybody Loves Languages and Gaotu Techedu’s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Everybody Loves Languages	$1.75 million	1.02	-$70,000.00	N/A	N/A
Gaotu Techedu	$362.21 million	1.85	$1.91 million	$0.10	25.80

Gaotu Techedu has higher revenue and earnings than Everybody Loves Languages.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Everybody Loves Languages and Gaotu Techedu, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Everybody Loves Languages	0	0	0	0	N/A
Gaotu Techedu	2	0	0	0	1.00

Gaotu Techedu has a consensus price target of $2.30, indicating a potential downside of 10.85%. Given Gaotu Techedu’s higher possible upside, analysts plainly believe Gaotu Techedu is more favorable than Everybody Loves Languages.

Risk and Volatility

Everybody Loves Languages has a beta of -2.52, meaning that its share price is 352% less volatile than the S&P 500. Comparatively, Gaotu Techedu has a beta of -0.52, meaning that its share price is 152% less volatile than the S&P 500.

Summary

Gaotu Techedu beats Everybody Loves Languages on 10 of the 10 factors compared between the two stocks.

About Everybody Loves Languages

Everybody Loves Languages Corp., an edtech language-learning and content development company, develops, markets, and supports a suite of English and other language learning solutions in the People's Republic of China. The company operates in two segments, Content-Based English Language Learning (License of Intellectual Property), and Online and Offline Language Learning. The Content-Based English Language Learning segment publishes print-based English language learning textbook programs. It co-publishes approximately 870 million units from library of program titles. The Online English Language Learning segment provides web-based educational technology language learning, training, and assessment solutions. It develops and markets libraries of online language learning resources and offers approximately 3,000 hours of interactive learning through various product offerings that include Winnie's World, English Academy, Campus, English for Success, AcadeMe English, AcadeMe Junior, and Master and Business English. The company markets its products in Latin America, Asia, Europe, and the United States through a network of distributors. The company was formerly known as Lingo Media Corporation and changed its name to Everybody Loves Languages Corp. in October 2022. Everybody Loves Languages Corp. is headquartered in Toronto, Canada.

About Gaotu Techedu

Gaotu Techedu Inc., a technology-driven education company, provides online K-12 after-school tutoring services in the People's Republic of China. The company provides foreign language courses comprising English and Japanese, as well as test preparation courses for students taking language certification exams; and professional courses primarily for college students and adults preparing for professional qualification exams, such teacher's qualification, Chartered Financial Analyst designation, Certified Public Accountant designation, Certified Tax Agent designation, securities qualification exams, and other exams. It also offers admission courses for admission tests and interviews, including national graduate entrance examination, civil service examinations, and others; and consulting services. In addition, the company provides online IT education courses, such as computer programming, as well as online courses on professional computer coding; career development courses, including memory enhancement courses, leadership and management training courses, and others; and courses to prepare and pass certain language exams for study abroad, such as IELTS and TOEFL. Further, it provides non-academic tutoring and personal interest courses comprising chess learning, family relationships and education, humanities, and science courses; and designs and develops course outlines, interactive courseware, practice exercises, and lesson notes, as well as reference books, such as Chinese dictionary, dictionary of idioms, and past exam questions of college entrance examination. Additionally, the company offers smart devices; multi-function translation pen, an electronic translation pen with Chinese/English translation capabilities; and learning apps. 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, the People's Republic of China.