Youdao (NYSE:DAO) Shares Gap Up - Time to Buy?

Key Points

• Youdao shares opened higher at $15.48 versus the prior close of $14.89, though they later traded around $15.30 on relatively low volume.
• Analyst sentiment remains mixed: Citigroup raised its price target to $22 and issued a Buy rating, while the overall consensus remains Hold with a $22 target.
• Youdao reported quarterly EPS of $0.11, exceeding the $0.02 consensus estimate, but revenue of $215.91 million fell short of the $229.02 million forecast; profitability metrics remained modest, including a 2.71% net margin and negative return on equity.

Youdao, Inc. Unsponsored ADR (NYSE:DAO - Get Free Report) gapped up prior to trading on Friday . The stock had previously closed at $14.89, but opened at $15.48. Youdao shares last traded at $15.2950, with a volume of 1,726 shares.

Analyst Upgrades and Downgrades

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

Youdao Stock Performance

The business's 50 day moving average is $15.49 and its 200 day moving average is $12.50. The company has a market capitalization of $1.82 billion, a price-to-earnings ratio of 75.89 and a beta of 0.52.

Youdao (NYSE:DAO - Get Free Report) last released its earnings results on Thursday, August 20th. The company reported $0.11 earnings per share for the quarter, topping the consensus estimate of $0.02 by $0.09. The company had revenue of $215.91 million for the quarter, compared to the consensus estimate of $229.02 million. Youdao had a net margin of 2.71% and a negative return on equity of 8.46%.

Hedge Funds Weigh In On Youdao

An institutional investor recently raised its stake in Youdao stock. Public Employees Retirement System of Ohio increased its position in Youdao, Inc. Unsponsored ADR (NYSE:DAO - Free Report) by 35.9% in the third quarter, according to its most recent 13F filing with the Securities and Exchange Commission (SEC). The fund owned 29,286 shares of the company's stock after acquiring an additional 7,729 shares during the period. Public Employees Retirement System of Ohio's holdings in Youdao were worth $291,000 as of its most recent filing with the Securities and Exchange Commission (SEC). Hedge funds and other institutional investors own 21.91% of the company's stock.

About Youdao

Youdao, Inc NYSE: DAO, established in 2006 as a subsidiary of NetEase, is headquartered in Beijing, China. The company went public on the New York Stock Exchange in October 2019, marking a significant milestone in its development as an intelligent learning and knowledge service provider. Since its inception, Youdao has combined cloud computing, artificial intelligence and big data analytics to create an adaptive learning ecosystem designed to meet the needs of individual learners and organizations.

At the core of Youdao's offerings is its suite of digital dictionaries and translation tools, including the flagship Youdao Dictionary app and translation engine.

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