Youdao (NYSE:DAO) Trading 4.2% Higher - Still a Buy?

Key Points

• Youdao shares rose 4.2% to $15.22 in midday trading, although trading volume was 88% below the average session volume.
• Analyst sentiment remains mixed: Citigroup raised its price target to $22 and rated the stock “Buy,” while the broader analyst consensus is “Hold” with a $22 average target.
• Youdao beat quarterly EPS estimates, reporting $0.11 versus the expected $0.02, but revenue of $215.91 million fell short of the $229.02 million consensus estimate. The stock trades at a high P/E ratio of 75.55.

Youdao, Inc. Unsponsored ADR (NYSE:DAO - Get Free Report) shares were up 4.2% during mid-day trading on Thursday . The company traded as high as $15.21 and last traded at $15.22. 9,769 shares changed hands during trading, a decline of 88% from the average session volume of 84,667 shares. The stock had previously closed at $14.60.

Wall Street Analysts Forecast Growth

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

Youdao Stock Up 2.9%

The company has a 50 day moving average price of $15.72 and a 200-day moving average price of $12.66. The company has a market cap of $1.81 billion, a P/E ratio of 75.55 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 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 firm had revenue of $215.91 million during the quarter, compared to the consensus estimate of $229.02 million.

Hedge Funds Weigh In On Youdao

A hedge fund recently bought a new position in Youdao stock. Public Employees Retirement System of Ohio bought a new stake in shares of Youdao, Inc. Unsponsored ADR (NYSE:DAO - Free Report) in the 2nd quarter, according to its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor bought 28,104 shares of the company's stock, valued at approximately $346,000. 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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