Youdao (NYSE:DAO) Shares Gap Up - Should You Buy?

Key Points

• Youdao shares gapped higher, opening at $16.00 versus a prior close of $14.65, but later traded at $15.27. The company has a market capitalization of approximately $1.80 billion.
• Analyst sentiment is mixed: Citigroup raised its price target to $22 and rated the stock a “Buy,” while overall coverage remains a “Hold” consensus with a $22 target price.
• Youdao beat quarterly earnings expectations, reporting $0.11 in EPS versus an estimated $0.02, although revenue of $215.91 million fell short of the $229.02 million consensus estimate. NetEase also acquired a 2.41% stake, and institutional investors own 21.91% of the stock.

Youdao, Inc. Unsponsored ADR (NYSE:DAO - Get Free Report) gapped up before the market opened on Thursday. The stock had previously closed at $14.65, but opened at $16.00. Youdao shares last traded at $15.27, with a volume of 630 shares.

Wall Street Analysts Forecast Growth

DAO has been the subject of several recent analyst reports. Citigroup increased their target price on Youdao from $14.90 to $22.00 and gave the company a "buy" rating in a research note on Monday, August 24th. Weiss Ratings raised Youdao from a "sell (d)" rating to a "sell (d+)" rating in a research report on Friday, July 17th. Finally, Wall Street Zen upgraded Youdao from a "hold" rating to a "buy" rating in a report on Saturday, August 22nd. One analyst has rated the stock with a Buy rating and one has given a Sell rating to the company. According to MarketBeat, the company currently has a consensus rating of "Hold" and a consensus target price of $22.00.

Youdao Trading Down 1.5%

The company has a market cap of $1.80 billion, a price-to-earnings ratio of 74.63 and a beta of 0.52. The company has a fifty day moving average price of $15.92 and a two-hundred day moving average price of $13.12.

Youdao (NYSE:DAO - Get Free Report) last issued its earnings results on Thursday, August 20th. The company reported $0.11 EPS for the quarter, beating analysts' consensus estimates of $0.02 by $0.09. Youdao had a negative return on equity of 8.46% and a net margin of 2.71%.The business had revenue of $215.91 million during the quarter, compared to analyst estimates of $229.02 million.

Hedge Funds Weigh In On Youdao

A hedge fund recently bought a new position in Youdao stock. NetEase Inc. bought a new stake in shares of Youdao, Inc. Unsponsored ADR (NYSE:DAO - Free Report) during the 2nd quarter, according to its most recent filing with the SEC. The fund bought 2,898,293 shares of the company's stock, valued at approximately $35,649,004. Youdao makes up 0.0% of NetEase Inc.'s portfolio, making the stock its 2nd largest position. NetEase Inc. owned about 2.41% of Youdao at the end of the most recent reporting period. 21.91% of the stock is currently owned by institutional investors and hedge funds.

About Youdao

Youdao, Inc NYSE: DAO is a technology company focused on providing learning, education and knowledge services. The company operates primarily in China and develops digital products designed to support language learning, academic study, professional development and the distribution of educational content.

Youdao's offerings include online learning services, educational applications and smart learning devices. Its products have included Youdao Dictionary, translation and dictionary tools, online courses, learning platforms and hardware such as scanning translation pens and other intelligent study devices.

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