Head to Head Review: Nerdy (NYSE:NRDY) and Gravitas Education (NYSE:GEHI)

Gravitas Education (NYSE:GEHI) and Nerdy (NYSE:NRDY) are both small-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Valuation & Earnings

This table compares Gravitas Education and Nerdy’s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gravitas Education	$50.01 million	0.36	-$41.37 million	N/A	N/A
Nerdy	$162.66 million	4.99	-$35.40 million	($0.55)	-8.71

Nerdy has higher revenue and earnings than Gravitas Education.

Insider and Institutional Ownership

8.5% of Gravitas Education shares are owned by institutional investors. Comparatively, 38.4% of Nerdy shares are owned by institutional investors. 64.1% of Gravitas Education shares are owned by insiders. Comparatively, 38.8% of Nerdy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Gravitas Education and Nerdy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gravitas Education	N/A	N/A	N/A
Nerdy	-28.84%	-79.68%	-43.89%

Risk and Volatility

Gravitas Education has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500. Comparatively, Nerdy has a beta of 2.09, indicating that its share price is 109% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for Gravitas Education and Nerdy, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gravitas Education	0	0	0	0	N/A
Nerdy	0	2	5	0	2.71

Nerdy has a consensus target price of $5.93, indicating a potential upside of 23.77%. Given Nerdy’s higher probable upside, analysts clearly believe Nerdy is more favorable than Gravitas Education.

Summary

Nerdy beats Gravitas Education on 7 of the 11 factors compared between the two stocks.

About Gravitas Education

Gravitas Education Holdings, Inc. provides early childhood education services in the People's Republic of China. It operates play-and-learn centers that offer services for the joint participation of 0-6-year-old children and their adult family members to promote children's development, foster bonding with family, and prepare them for their entry into kindergartens and primary schools. The company also operates student care centers; teaching facilities; and provides course content, training, support and guidance, and other services to franchisees and licensees. In addition, it develops and sells educational products and services; and distributes merchandise, such as teaching aids, educational toys, at-home educational products, and school uniforms through franchisees and other business partners, as well as directly to a market of families. Further, the company operates Qingtian Youpin, an e-commerce platform for maternity and children's products. The company was formerly known as RYB Education, Inc. and changed its name to Gravitas Education Holdings, Inc. in May 2022. Gravitas Education Holdings, Inc. was founded in 1998 and is based in Beijing, China.

About Nerdy

Nerdy, Inc. operates platform for live online learning. The company's purpose-built proprietary platform leverages technology, including AI to connect students, users, parents, guardians, and purchasers of various ages to tutors, instructors, subject matter experts, educators, and other professionals, delivering value on both sides of the network. Its learning destination provides learning experiences across various subjects and multiple formats, including one-on-one instruction, small group classes, large format group classes, coding, tutor chat, essay review, and adaptive self-study. The company's flagship business, Varsity Tutors, operates platforms for live online tutoring and classes. Its solutions are available directly to learners, as well as through schools and other institutions. The company was founded in 2007 and is headquartered in Saint Louis, Missouri.