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Youdao (DAO)
NYSE:DAO
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Youdao
(NYSE:DAO)
53Neutral
Youdao (DAO) vs. S&P 500 (SPY)
Market Cap
$972.88M
Dividend YieldN/A
Average Volume (3M)257.29K
Price to Earnings (P/E)83.7
Beta (1Y)1.34
Revenue Growth5.51%
EPS GrowthN/A
CountryUS
Employees4,364
SectorTechnology
Sector Strength45
IndustryEducation
Share Statistics
EPS (TTM)0.10
Shares Outstanding31,230,583
10 Day Avg. Volume203,929
30 Day Avg. Volume257,287
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.18
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$8.10Price Target Upside-0.49% Downside
Rating ConsensusHold
Number of Analyst Covering1
Youdao Business Overview & Revenue Model
Company DescriptionYoudao (DAO) is a prominent Chinese technology company specializing in intelligent learning products and services. Operating mainly in the education technology sector, Youdao provides a wide array of digital solutions, including online courses, smart learning devices, and language translation tools. The company's core offerings are focused on enhancing learning experiences through advanced AI and machine learning technologies.
How the Company Makes MoneyYoudao generates revenue through multiple streams primarily centered around its educational service offerings. The company earns money by offering paid online courses and educational content, which are available through subscription models and one-time payments. Additionally, Youdao's smart learning devices, such as electronic dictionaries and smart pens, contribute to its hardware sales revenue. The company also monetizes its language translation services through premium subscriptions and enterprise solutions. Partnerships with educational institutions and continuous advancements in AI technology also play a significant role in expanding Youdao's customer base and enhancing its revenue potential.
Youdao Financial Statement Overview
Summary
Youdao exhibits strong revenue growth yet struggles with profitability and cash generation. The negative equity and high debt levels pose risks to financial stability. Improvement in operational efficiency and financial structure is necessary for sustainable growth.Income Statement
Youdao's revenue growth has been consistent over the years, with a noticeable increase from 2019 to 2023. However, the company consistently reports negative EBIT and net income, indicating ongoing operational challenges and unprofitability. The negative net profit margin highlights profitability issues.45
Neutral
Balance Sheet
The balance sheet reveals a highly leveraged position with a negative stockholders' equity, indicating financial instability. The debt-to-equity ratio cannot be calculated due to negative equity, which is a significant concern. The equity ratio is negative, reflecting a need for improved financial health.30
Negative
Cash Flow
Youdao's operating cash flow has been negative across the years, showing difficulties in generating cash from operations. Free cash flow has also been negative, although it has shown improvement over the years. The company struggles to convert operating performance into cash.40
Negative
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.73B | 5.39B | 5.01B | 4.02B | 3.17B | 1.30B | Gross Profit |
| 2.92B | 2.77B | 2.59B | 1.99B | 1.45B | 370.62M | EBIT |
| -24.03M | -466.33M | -774.68M | -886.47M | -1.81B | -600.92M | EBITDA |
| -32.54M | -439.92M | -680.33M | -856.37M | -749.42M | -417.19M | Net Income Common Stockholders |
| -133.47M | -549.93M | -739.78M | -926.09M | -1.75B | -601.46M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.62B | 526.66M | 1.02B | 826.88M | 1.19B | 1.62B | Total Assets |
| 2.09B | 1.67B | 2.28B | 2.63B | 2.07B | 2.09B | Total Debt |
| 899.21M | 1.60B | 1.44B | 1.21B | 957.75M | 899.21M | Net Debt |
| 725.88M | 1.14B | 660.37M | 883.32M | 348.55M | 725.88M | Total Liabilities |
| 1.79B | 3.80B | 3.75B | 3.36B | 3.48B | 1.79B | Stockholders Equity |
| 300.09M | -2.19B | -1.54B | -807.07M | -1.41B | 300.09M |
| Cash Flow | Free Cash Flow | ||||
| 0.00 | -456.00M | -672.88M | -1.41B | -358.42M | -390.45M | Operating Cash Flow |
| 0.00 | -438.14M | -603.12M | -1.35B | -321.56M | -372.27M | Investing Cash Flow |
| 0.00 | 125.57M | 125.82M | 47.07M | 760.97M | -1.08B | Financing Cash Flow |
| 0.00 | -18.94M | 184.65M | 1.78B | 26.56M | 1.59B |
Youdao Technical Analysis
Positive
8.14
Price Trends
8.19
Positive
7.01
Positive
5.34
Positive
Market Momentum
>-0.01
Positive
45.42
Neutral
15.84
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DAO, the sentiment is Positive. The current price of 8.14 is below the 20-day moving average (MA) of 9.38, below the 50-day MA of 8.19, and above the 200-day MA of 5.34, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 45.42 is Neutral, neither overbought nor oversold. The STOCH value of 15.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DAO.
Youdao Risk Analysis
Youdao disclosed 97 risk factors in its most recent earnings report. Youdao reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Youdao Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $8.01B | 20.79 | 10.40% | ― | 34.42% | 28.54% | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% | |
55 Neutral | $114.43M | ― | 180.24% | ― | 70.56% | 9.71% | |
53 Neutral | $972.88M | 83.74 | 25.15% | ― | 5.51% | ― | |
49 Neutral | $15.11M | ― | -45.26% | ― | 20.58% | 18.04% | |
42 Neutral | $45.63M | ― | -96.68% | ― | -15.92% | -164.65% |
* Technology Sector Average
Performance Comparison
DAO
Youdao
8.32
3.86
86.55%
EDU
New Oriental Education Tech
49.01
-39.58
-44.68%
COE
China Online Education Group
20.00
13.29
198.06%
BEDU
Bright Scholar Education Holdings
1.46
-0.73
-33.33%
YQ
17 Education & Technology Group
1.95
-1.12
-36.48%
Youdao Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -21.96% | Next Earnings Date: May 27, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments and challenges. The company achieved record profitability and strong growth in AI-driven services and smart devices, but faced revenue declines in learning services and overall Q4 revenue. The strategic focus on AI and operational efficiency suggests a positive outlook.Highlights
Record Profitability Achieved
For the first time, Youdao achieved full-year operating profitability with an income from operations of RMB148.8 million, a turnaround from a loss of RMB466.3 million in 2023.
AI-Driven Subscription Services Growth
AI-driven subscription services generated sales of over RMB200 million, representing an increase of over 130% year-over-year.
Smart Devices Segment Performance
Net revenues from smart devices reached RMB240.4 million in Q4, marking an 8.1% year-over-year increase, driven by the success of the Youdao Dictionary Pen.
Online Marketing Services Growth
Net revenues from online marketing services were up 48.3% year-over-year to RMB2 billion for the full year.
Successful Launch of New AI Model
The rollout of Confucius-o1, a reasoning model, supports deployment on consumer-grade GPUs and is notable for being open-sourced, encouraging innovation in the education sector.
Lowlights
Learning Services Revenue Decline
Net revenues from learning services reached RMB617.7 million in Q4, down by 21.2% year-over-year, contributing to a full-year decline of 12.7%.
Total Revenue Decrease in Q4
Total net revenues were RMB1.3 billion in Q4, representing a 9.5% decrease from the same period of 2023.
Reduced Gross Margin in Learning Services
Gross margin for learning services was 60% for Q4 2024, compared with 63.6% for the same period of 2023.
Company Guidance
During the Youdao 2024 Fourth Quarter and Full-Year Earnings Conference Call, the company provided detailed guidance on its financial performance and strategic direction. In Q4 2024, Youdao reported net revenues of RMB1.3 billion, marking a 9.5% year-over-year decline, primarily due to decreased revenues from learning services, which fell 21.2% to RMB617.7 million. Despite this, the company achieved a 10.3% increase in income from operations, reaching RMB84.2 million. For the full year, net revenues grew by 4.4% to RMB5.6 billion, with a significant turnaround in operational performance, achieving a profit of RMB148.8 million compared to a loss of RMB466.3 million in 2023. Operating cash outflow improved by 84.5% to RMB67.9 million. Key strategic focuses included leveraging cutting-edge AI technologies in education and online marketing, enhancing products like the Youdao Dictionary Pen, and expanding global advertising efforts. The company also highlighted its AI-driven subscription services, which saw an over 130% increase in sales, and its commitment to innovation with the launch of Confucius-o1, a reasoning model for educational use. For 2025, Youdao aims for moderate revenue growth with a continued focus on profitability, driven by advancements in AI integration across its business lines.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.