China Online Education Group (COE) & GP Strategies Corporation (GPX) Critical Comparison

China Online Education Group (NYSE: COE) and GP Strategies Corporation (NYSE:GPX) are both small-cap consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Analyst Ratings

This is a summary of current recommendations and price targets for China Online Education Group and GP Strategies Corporation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
China Online Education Group	0	0	0	0	N/A
GP Strategies Corporation	0	1	1	0	2.50

GP Strategies Corporation has a consensus target price of $29.50, suggesting a potential upside of 3.15%. Given GP Strategies Corporation’s higher possible upside, analysts plainly believe GP Strategies Corporation is more favorable than China Online Education Group.

Volatility & Risk

China Online Education Group has a beta of -1.54, indicating that its stock price is 254% less volatile than the S&P 500. Comparatively, GP Strategies Corporation has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500.

Insider & Institutional Ownership

24.1% of China Online Education Group shares are held by institutional investors. Comparatively, 88.3% of GP Strategies Corporation shares are held by institutional investors. 25.7% of GP Strategies Corporation shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares China Online Education Group and GP Strategies Corporation’s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
China Online Education Group	$75.77 million	4.34	-$80.07 million	($6.39)	-2.57
GP Strategies Corporation	$502.87 million	0.95	$39.32 million	$1.28	22.34

GP Strategies Corporation has higher revenue and earnings than China Online Education Group. China Online Education Group is trading at a lower price-to-earnings ratio than GP Strategies Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares China Online Education Group and GP Strategies Corporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Online Education Group	-117.94%	-2,476.17%	-78.28%
GP Strategies Corporation	4.27%	12.56%	6.67%

Summary

GP Strategies Corporation beats China Online Education Group on 11 of the 12 factors compared between the two stocks.

About China Online Education Group

China Online Education Group is engaged in providing online English language education services to students in the People’s Republic of China (the PRC). The Company operates an online education platform that provides online tutoring programs to students through the Internet. Its platform analyzes teachers’ teaching aptitudes, feedback and rating from students, as well as background, and recommends suitable teachers to students according to their respective characteristics and learning objectives. The Company develops and tailors its curriculum to its interactive lesson format. The Company offers various courses, which include Classic English and Classic English Junior that are focused on the development of English communication skills. The Company also offers various specialty courses that are focused at situation-based English education and test preparation needs, such as Business English and International English Language Testing System (IELTS) Speaking.

About GP Strategies Corporation

GP Strategies Corporation (GP Strategies) is a global performance improvement solutions provider of sales and technical training, e-learning solutions, management consulting and engineering services. The Company operates in five segments: Learning Solutions, Professional & Technical Services, Sandy Training & Marketing, RWD and Energy Services. Its clients include companies and governmental and other commercial customers in a variety of industries. It serves companies in the automotive, steel, oil and gas, power, chemical, electronics and technology, manufacturing, software, financial, retail, healthcare and food and beverage industries, as well as government agencies. On December 31, 2011, GP Strategies Corporation merged with and into its operating subsidiary, General Physics Corporation (General Physics). In April 2014, the Company acquired Effective-People and Effective-Learning companies.