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

Key Points

• Youdao shares gapped higher, opening at $16.59 versus a prior close of $15.63, although they later traded near $16.56. The company has a market capitalization of about $1.99 billion and a P/E ratio of 82.54.
• Analyst sentiment remains mixed: Citigroup raised its price target to $22 and issued a Buy rating, while the overall consensus rating is Hold, with one Buy and one Sell rating.
• Youdao exceeded quarterly EPS expectations, reporting $0.11 versus the $0.02 consensus, but revenue of $215.91 million fell short of estimates. NetEase acquired a 2.41% stake, and institutional investors own 21.91% of the company.

Shares of Youdao, Inc. Unsponsored ADR (NYSE:DAO - Get Free Report) gapped up prior to trading on Wednesday. The stock had previously closed at $15.63, but opened at $16.59. Youdao shares last traded at $16.5640, with a volume of 3,724 shares trading hands.

Analysts Set New Price Targets

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

Youdao Trading Down 1.9%

The firm has a market cap of $1.99 billion, a P/E ratio of 82.54 and a beta of 0.52. The company has a fifty day moving average price of $15.93 and a two-hundred day moving average price of $13.28.

Youdao (NYSE:DAO - Get Free Report) last posted its earnings results on Thursday, August 20th. The company reported $0.11 earnings per share (EPS) for the quarter, topping 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 analysts' expectations of $229.02 million.

Hedge Funds Weigh In On Youdao

An institutional investor recently bought a new position in Youdao stock. NetEase Inc. purchased a new stake in Youdao, Inc. Unsponsored ADR (NYSE:DAO - Free Report) during the 2nd quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The firm purchased 2,898,293 shares of the company's stock, valued at approximately $35,649,004. Youdao accounts for 0.0% of NetEase Inc.'s investment portfolio, making the stock its 2nd biggest position. NetEase Inc. owned 2.41% of Youdao at the end of the most recent reporting period. 21.91% of the stock is owned by institutional investors.

Youdao Company Profile

Youdao, Inc NYSE: DAO is a technology company focused on digital learning and knowledge services. It is a subsidiary of NetEase, Inc and develops internet-based tools that support language learning, education, translation and professional development.

The company offers online courses and learning applications covering subjects such as languages, academic preparation and professional skills. Its product portfolio has also included Youdao Dictionary, translation and writing tools, and smart learning hardware such as dictionary pens, scanning devices and other connected products designed to support students and educators.

Youdao primarily serves users in China through its online platforms, educational content and learning devices, while some of its language and translation products are available to users internationally.

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