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Why Shares of GSX Techedu Surged Today

By Timothy Green – Updated Feb 18, 2020 at 12:04PM

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The Chinese education company reported exceptionally strong growth.

What happened

Shares of GSX Techedu (GOTU -0.33%) jumped on Tuesday after the Chinese education company reported its fourth-quarter results. GSX beat analyst estimates across the board, and both revenue and net income soared. The stock was up 11% at 11:40 a.m. EST.

So what

GSX reported fourth-quarter revenue of 935 million yuan, up more than 400% from the prior-year period. That works out to about $134 million at current exchange rates, ahead of the average analyst estimate by about $12.6 million. Gross billings soared nearly 400% to 1.58 billion yuan, while total enrollments surged 290% to 1.12 million.

A rising chart.

Image source: Getty Images.

Net income was up 659% to 197.8 million yuan. In U.S. dollars, earnings per share were $0.10, beating analyst expectations by $0.02.

Now what

For the first quarter of 2020, GSX expects to produce revenue between 1.086 billion and 1.106 billion yuan, up a bit more than 300% year over year.

"Going forward, we will continue to enhance the quality of our courses and services and leverage technology to optimize operational efficiency in order to generate long-term sustainable growth healthy," said GSX CFO Shannon Shen.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Gaotu Techedu Inc. Stock Quote
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