Youdao, Inc. (DAO) AI Stock Analysis

Youdao, Inc., a subsidiary of NetEase, Inc. based in Hangzhou, China, operates an online platform integrating content, community, communication, and commerce. The company is organized into three core segments: Learning Services, Smart Devices, and Online Marketing Services. Learning Services provides educational content, apps, online dictionaries, translation tools, tutoring, STEAM education, vocational training, and China University MOOC courses. Its Smart Devices segment offers hardware such as the Youdao Dictionary Pen, Listening Pod, Smart Lamp, Pocket Translator, and Super Dictionary. It also supplies education digitalization solutions, including Smart Cloud services, to schools and enterprises.

Revenue increased from $4.02B in FY2021 to $5.91B in FY2025, reflecting a 5-year revenue CAGR of 13.3%. Annual revenue growth moderated from 26.8% in FY2021 and 24.8% in FY2022 to 4.4% in FY2024 and 5.0% in FY2025. Gross margin contracted from 49.5% in FY2021 to 44.3% in FY2025. Operating margin shifted from -21.2% in FY2021 to 3.9% in FY2025, while net income improved from -$995.7M to $107.3M over the same timeframe. Over the trailing twelve months, revenue reached $6.01B with an operating margin of 7.6% and net margin of 2.7%. For the latest quarter ended June 30, 2026, quarterly revenue grew 3.5% year-over-year, while quarterly earnings declined 50.0%.

As of June 30, 2026, Youdao held $846.3M in cash and short-term investments against total debt of $1.71B, resulting in net debt of $866.7M. Total assets stood at $1.96B, while shareholders' equity was -$1.85B, reflecting negative equity. The company reported a current ratio of 0.58. Cash flow improved in FY2025, generating $55.2M in operating cash flow and $29.6M in free cash flow after $25.6M in capital expenditures. Its share count changed by -2.1% over 5 years.

At a last close of $18.16 on October 16, 2026, Youdao traded at a trailing P/E of 95.6x, well above the 18.6x median of its US-listed Consumer Defensive peers. Its EV/EBITDA of 53.8x also exceeded the peer median of 11.7x, whereas its price-to-sales multiple of 0.4x was below the peer median of 0.7x. The company's enterprise value stood at $1.89B with a market cap of $2.19B. Over the past year, DAO returned 59.6%, outpacing the S&P 500 return of 16.8%, while its 5-year return of 52.2% trailed the S&P 500 return of 83.0%.

Wall Street coverage consists of 6 Strong Buy, 1 Buy, 0 Hold, 0 Sell, and 0 Strong Sell recommendations. The mean price target is $19.88, representing a 9.5% upside over the last close of $18.16. For the fiscal year ending December 31, 2026, consensus estimates project revenue of $6.44B and EPS of $1.88, implying 39.1% EPS growth. Over the last 4 quarters, the company delivered 1 EPS beat. The next earnings release is scheduled for November 19, 2026.

This page is an AI-written research summary of Youdao, Inc. (DAO). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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