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DAO

Youdao NYSE:DAO Stock Report

Last Price

US$5.03

Market Cap

US$612.2m

7D

-9.2%

1Y

-75.9%

Updated

05 Jul, 2022

Data

Company Financials +
DAO fundamental analysis
Snowflake Score
Valuation3/6
Future Growth2/6
Past Performance0/6
Financial Health0/6
Dividends0/6

DAO Stock Overview

Youdao, Inc., an internet technology company, provides online services in the field of content, community, communication, and commerce in China.

Youdao Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Youdao
Historical stock prices
Current Share PriceUS$5.03
52 Week HighUS$23.45
52 Week LowUS$4.31
Beta-0.58
1 Month Change7.48%
3 Month Change-36.33%
1 Year Change-75.93%
3 Year Changen/a
5 Year Changen/a
Change since IPO-59.76%

Recent News & Updates

Jun 25
A Look At The Intrinsic Value Of Youdao, Inc. (NYSE:DAO)

A Look At The Intrinsic Value Of Youdao, Inc. (NYSE:DAO)

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Youdao, Inc...

Jun 03

Youdao: Visibility For A Turnaround

Youdao is a leading digital education provider in China, and a subsidiary holing of the internet giant NetEase. As of December 2021, Youdao boasted a monthly active user base of >100 million and a rich portfolio of online learning products. Youdao has enjoyed supercharged growth as revenues jumped from $189 million in 2019 to $622 million in 2021, reflecting a 2-year CAGR of approximately 80%. Based on the assumption that Youdao will turn profitable in 2024, I issue a buy recommendation and set a target price of $6.71/share.

Shareholder Returns

DAOUS Consumer ServicesUS Market
7D-9.2%-0.6%-2.2%
1Y-75.9%-47.3%-19.1%

Return vs Industry: DAO underperformed the US Consumer Services industry which returned -47.3% over the past year.

Return vs Market: DAO underperformed the US Market which returned -19.1% over the past year.

Price Volatility

Is DAO's price volatile compared to industry and market?
DAO volatility
DAO Average Weekly Movement19.5%
Consumer Services Industry Average Movement9.4%
Market Average Movement8.1%
10% most volatile stocks in US Market16.9%
10% least volatile stocks in US Market3.3%

Stable Share Price: DAO is more volatile than 90% of US stocks over the past 3 months, typically moving +/- 20% a week.

Volatility Over Time: DAO's weekly volatility (20%) has been stable over the past year, but is still higher than 75% of US stocks.

About the Company

FoundedEmployeesCEOWebsite
20066,096Feng Zhouhttps://www.youdao.com

Youdao, Inc., an internet technology company, provides online services in the field of content, community, communication, and commerce in China. It operates through three segments: Learning Services, Smart Devices, and Online Marketing Services. The company provides various learning content, applications, and solutions, which cover topics and target people from various age groups for their learning needs through its websites and mobile applications.

Youdao Fundamentals Summary

How do Youdao's earnings and revenue compare to its market cap?
DAO fundamental statistics
Market CapCN¥4.11b
Earnings (TTM)-CN¥771.52m
Revenue (TTM)CN¥4.27b

1.0x

P/S Ratio

-5.5x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
DAO income statement (TTM)
RevenueCN¥4.27b
Cost of RevenueCN¥2.13b
Gross ProfitCN¥2.13b
Other ExpensesCN¥2.91b
Earnings-CN¥771.52m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-6.12
Gross Margin50.00%
Net Profit Margin-18.08%
Debt/Equity Ratio-151.8%

How did DAO perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is DAO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Price-To-Sales vs Peers

  • Price-To-Sales vs Industry

  • Price-To-Sales vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DAO?

Other financial metrics that can be useful for relative valuation.

DAO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.2x
Enterprise Value/EBITDA-6.7x
PEG Ration/a

Price to Sales Ratio vs Peers

How does DAO's PS Ratio compare to its peers?

DAO PS Ratio vs Peers
The above table shows the PS ratio for DAO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average1.9x
GOTU Gaotu Techedu
0.6x-19.9%US$506.0m
AFYA Afya
2.5x15.5%US$902.3m
ARCE Arco Platform
3.3x21.1%US$832.6m
TWOU 2U
1x12.0%US$944.1m
DAO Youdao
1x21.8%US$612.2m

Price-To-Sales vs Peers: DAO is good value based on its Price-To-Sales Ratio (1x) compared to the peer average (1.9x).


Price to Earnings Ratio vs Industry

How does DAO's PE Ratio compare vs other companies in the US Consumer Services Industry?

Price-To-Sales vs Industry: DAO is good value based on its Price-To-Sales Ratio (1x) compared to the US Consumer Services industry average (1.3x)


Price to Sales Ratio vs Fair Ratio

What is DAO's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DAO PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio1x
Fair PS Ratio2.4x

Price-To-Sales vs Fair Ratio: DAO is good value based on its Price-To-Sales Ratio (1x) compared to the estimated Fair Price-To-Sales Ratio (2.4x).


Share Price vs Fair Value

What is the Fair Price of DAO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DAO ($5.03) is trading above our estimate of fair value ($4.83)

Significantly Below Fair Value: DAO is trading above our estimate of fair value.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate DAO's PEG Ratio to determine if it is good value.


Discover undervalued companies

Future Growth

How is Youdao forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


92.8%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DAO is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: DAO is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: DAO is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: DAO's revenue (21.8% per year) is forecast to grow faster than the US market (7.8% per year).

High Growth Revenue: DAO's revenue (21.8% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if DAO's Return on Equity is forecast to be high in 3 years time


Discover growth companies

Past Performance

How has Youdao performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-39.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: DAO is currently unprofitable.

Growing Profit Margin: DAO is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: DAO is unprofitable, and losses have increased over the past 5 years at a rate of 39.1% per year.

Accelerating Growth: Unable to compare DAO's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: DAO is unprofitable, making it difficult to compare its past year earnings growth to the Consumer Services industry (-8.9%).


Return on Equity

High ROE: DAO's liabilities exceed its assets, so it is difficult to calculate its Return on Equity.


Discover strong past performing companies

Financial Health

How is Youdao's financial position?

Financial Health Score

0/6

Financial Health Score 0/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Stable Cash Runway

  • Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: DAO has negative shareholder equity, which is a more serious situation than short term assets not covering short term liabilities.

Long Term Liabilities: DAO has negative shareholder equity, which is a more serious situation than short term assets not covering long term liabilities.


Debt to Equity History and Analysis

Debt Level: DAO has negative shareholder equity, which is a more serious situation than a high debt level.

Reducing Debt: DAO's has negative shareholder equity, so we do not need to check if its debt has reduced over time.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: DAO has less than a year of cash runway based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if DAO has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Discover healthy companies

Dividend

What is Youdao current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate DAO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate DAO's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if DAO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if DAO's dividend payments have been increasing.


Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as DAO has not reported any payouts.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.5yrs

Average board tenure


CEO

Feng Zhou (44 yo)

no data

Tenure

Mr. Feng Zhou is Chief Executive Officer of Youdao, Inc. and serves as a Director since April 2018. Mr. Zhou has been Senior Vice President of Search Operations of NetEase, Inc since August 20, 2007. At Ne...


Board Members

Experienced Board: DAO's board of directors are considered experienced (3.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Youdao, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Youdao, Inc.
  • Ticker: DAO
  • Exchange: NYSE
  • Founded: 2006
  • Industry: Education Services
  • Sector: Consumer Services
  • Implied Market Cap: US$612.212m
  • Shares outstanding: 125.97m
  • Website: https://www.youdao.com

Number of Employees


Location

  • Youdao, Inc.
  • No. 399, Wangshang Road
  • Binjiang District
  • Hangzhou
  • Zhejiang Province
  • 310051
  • China

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/07/05 00:00
End of Day Share Price2022/07/05 00:00
Earnings2022/03/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.