Gaotu Techedu Inc. (GOTU) stock plummeted 5.24% in pre-market trading on Monday, as the company is expected to post a substantial loss in its upcoming earnings report.
According to analyst estimates, Gaotu Techedu is projected to report a loss of 76 fen (approximately $0.12) per share for the quarter ended December 31, 2024. While the company's revenue is anticipated to rise by 72.2% year-over-year to CNY 1.31 billion ($201 million), the expected earnings loss has weighed heavily on the stock's performance.
The Beijing-based online education company's shares have been under pressure amid concerns over its profitability and the highly competitive landscape in China's education technology sector. Despite the revenue growth, Gaotu Techedu has struggled to generate profits, which has raised doubts among investors about the sustainability of its business model.