Youdao (NYSE:DAO) Shares Down 6.9% - Time to Sell?

Key Points

• Youdao shares fell 6.9% on Friday to about $10.93 (intraday low $11.00) on unusually light trading, with ~7,562 shares changing hands—down ~91% from the average daily volume.
• Analyst views are mixed: Citigroup and Wall Street Zen recently upgraded DAO from "hold" to "buy", but MarketBeat's consensus remains "Hold" (one buy, one sell).
• The company beat earnings estimates (Q EPS $0.07 vs $0.04 est.; revenue $223.6M vs $211.5M) yet trades at a high PE (~82.7) and shows weak profitability (net margin 1.81%, negative ROE -6.41%).

Youdao, Inc. Unsponsored ADR (NYSE:DAO - Get Free Report)'s stock price dropped 6.9% during trading on Friday . The company traded as low as $11.00 and last traded at $10.9270. Approximately 7,562 shares traded hands during mid-day trading, a decline of 91% from the average daily volume of 88,915 shares. The stock had previously closed at $11.74.

Wall Street Analysts Forecast Growth

DAO has been the topic of a number of research analyst reports. Wall Street Zen upgraded Youdao from a "hold" rating to a "buy" rating in a research report on Saturday, April 18th. Citigroup upgraded Youdao from a "hold" rating to a "buy" rating in a research report on Thursday, February 12th. One analyst has rated the stock with a Buy rating and one has issued a Sell rating to the stock. According to MarketBeat.com, the stock has a consensus rating of "Hold".

Youdao Price Performance

The company has a market capitalization of $1.28 billion, a PE ratio of 82.72 and a beta of 0.48. The business has a 50-day moving average of $10.27 and a 200 day moving average of $10.24.

Youdao (NYSE:DAO - Get Free Report) last posted its earnings results on Thursday, February 12th. The company reported $0.07 EPS for the quarter, topping analysts' consensus estimates of $0.04 by $0.03. Youdao had a negative return on equity of 6.41% and a net margin of 1.81%.The company had revenue of $223.64 million for the quarter, compared to the consensus estimate of $211.46 million.

Institutional Investors Weigh In On Youdao

An institutional investor recently raised its position in Youdao stock. Public Employees Retirement System of Ohio boosted its stake in shares of Youdao, Inc. Unsponsored ADR (NYSE:DAO - Free Report) by 35.9% during the 3rd quarter, according to its most recent disclosure 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 quarter. Public Employees Retirement System of Ohio's holdings in Youdao were worth $291,000 as of its most recent SEC filing. Institutional investors own 21.91% of the company's stock.

Youdao Company Profile

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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