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Youdao Inc (DAO)
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Upturn Advisory Summary
01/02/2026: DAO (1-star) is currently NOT-A-BUY. Pass it for now.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
Number of Analysts
8 Analysts rated it
Limited analyst coverage, niche firm, research info may be scarce.
1 Year Target Price $12.94
1 Year Target Price $12.94
| 5 | Strong Buy |
| 1 | Buy |
| 2 | Hold |
| 0 | Sell |
| 0 | Strong Sell |
Analysis of Past Performance
Type Stock | Historic Profit -5.29% | Avg. Invested days 25 | Today’s Advisory PASS |
Upturn Star Rating | Upturn Advisory Performance  2.0 | Stock Returns Performance  1.0 |
| Profits based on simulation | Last Close 01/02/2026 |
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 1.19B USD | Price to earnings Ratio 36.78 | 1Y Target Price 12.94 |
Price to earnings Ratio 36.78 | 1Y Target Price 12.94 | ||
Volume (30-day avg) 8 | Beta 0.24 | 52 Weeks Range 6.30 - 11.82 | Updated Date 11/13/2025 |
52 Weeks Range 6.30 - 11.82 | Updated Date 11/13/2025 | ||
Dividends yield (FY) - | Basic EPS (TTM) 0.27 |
Analyzing Revenue: Products, Geography and Growth
Revenue by Products
Product revenue - Year on Year
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin 4.05% | Operating Margin (TTM) 2.03% |
Management Effectiveness
Return on Assets (TTM) 11.19% | Return on Equity (TTM) - |
Valuation
Trailing PE 36.78 | Forward PE - | Enterprise Value 1522807414 | Price to Sales(TTM) 0.24 |
Enterprise Value 1522807414 | Price to Sales(TTM) 0.24 | ||
Enterprise Value to Revenue 1.87 | Enterprise Value to EBITDA 50.03 | Shares Outstanding 31280889 | Shares Floating 26257520 |
Shares Outstanding 31280889 | Shares Floating 26257520 | ||
Percent Insiders 4.35 | Percent Institutions 41.98 |
Upturn AI SWOT
Youdao Inc
Company Overview
History and Background
Youdao Inc. (NYSE: DAO) was founded in 2006 by NetEase, Inc. Initially launched as a search engine and dictionary product, Youdao has evolved into a leading intelligent learning company in China. Its significant milestones include the expansion into online education services, the development of intelligent hardware, and its spin-off and IPO on the New York Stock Exchange in 2019. Youdao's journey reflects a strategic shift from internet services to a dedicated focus on education technology.
Core Business Areas
- Intelligent Learning: This segment focuses on online courses, educational content, and learning tools for students of all ages, from K-12 to adult learners. It includes live classes, pre-recorded courses, and personalized learning experiences powered by AI.
- Intelligent Learning Hardware: Youdao develops and sells smart learning devices such as translation earbuds, smart dictionaries, tablets, and reading pens, integrating AI and educational content into hardware solutions.
- Online Advertising and Others: This segment includes traditional online advertising services, as well as other emerging initiatives and services.
Leadership and Structure
Youdao is led by its CEO, Mr. Chun Zhang. As a subsidiary of NetEase, it operates with a degree of independence while leveraging synergies with its parent company. The organizational structure is typically divided across its core business segments, research and development, and sales and marketing.
Top Products and Market Share
Key Offerings
- Youdao Dictionary (App): One of Youdao's flagship products, offering comprehensive dictionary services, translation, and language learning tools. It has a massive user base in China, estimated in the hundreds of millions. Competitors include Baidu Translate, Google Translate (less prevalent in mainland China), and other dictionary apps.
- Youdao Premium Courses: Online courses for K-12 students, covering various subjects like English and Math. This segment competes directly with major Chinese online education platforms like TAL Education Group (TAL), Gaotu Techedu (GOTU), and New Oriental Education & Technology Group (EDU).
- Youdao Smart Learning Devices: Products like Youdao Translation Earbuds, Youdao Smart Pen, and Youdao Tablet aim to enhance learning through technology. Key competitors in the smart hardware space include Xiaomi (for smart devices) and various educational hardware providers.
Market Dynamics
Industry Overview
Youdao operates within the rapidly growing Chinese education technology (EdTech) and intelligent hardware markets. The EdTech sector has seen significant investment and innovation, driven by demand for quality education and the adoption of digital learning solutions. The intelligent hardware market is also expanding, with a focus on smart consumer electronics and personalized devices.
Positioning
Youdao is positioned as a leading intelligent learning company in China, leveraging its strong brand recognition, extensive user base from its dictionary app, and robust AI capabilities. Its integrated approach, combining online education with smart hardware, provides a unique competitive advantage. The company benefits from the backing of NetEase, a major Chinese internet technology company.
Total Addressable Market (TAM)
The total addressable market for Youdao is substantial, encompassing the vast Chinese education market (estimated to be hundreds of billions of dollars annually) and the burgeoning smart hardware and AI-driven learning solutions market. Youdao is well-positioned to capture a significant share of this market by catering to various age groups and learning needs with its diverse product and service offerings.
Upturn SWOT Analysis
Strengths
- Strong brand recognition and user base in China, particularly from Youdao Dictionary.
- Integration of AI technology into learning products and services.
- Diversified business model encompassing online courses, hardware, and advertising.
- Backed by NetEase, providing financial stability and operational support.
- Experienced management team with deep understanding of the Chinese market.
Weaknesses
- Intense competition in the Chinese EdTech market.
- Reliance on the Chinese market, subject to regulatory changes.
- Potential challenges in scaling intelligent hardware production and distribution efficiently.
- Profitability can be impacted by significant R&D investments and marketing spend.
Opportunities
- Continued growth in the online education sector, especially for personalized and AI-driven learning.
- Expansion of intelligent learning hardware into new product categories and international markets.
- Leveraging its data analytics capabilities to enhance user experience and product development.
- Potential for strategic partnerships and acquisitions to broaden its offerings.
- Increasing demand for lifelong learning and professional development.
Threats
- Increasing regulatory scrutiny on the EdTech industry in China.
- Intensifying competition from established players and new entrants.
- Economic slowdown impacting consumer spending on education and premium hardware.
- Rapid technological advancements requiring continuous innovation and investment.
- Changes in consumer preferences and learning trends.
Competitors and Market Share
Key Competitors
- TAL Education Group (TAL)
- Gaotu Techedu Inc. (GOTU)
- New Oriental Education & Technology Group Inc. (EDU)
- Baidu Inc. (BIDU) - for search and AI-related services
- Tencent Holdings Ltd. (TCEHY) - for broader education and tech ecosystem
Competitive Landscape
Youdao's competitive advantages lie in its integrated approach, strong brand loyalty from its dictionary app, and its investment in AI. However, it faces fierce competition from larger, well-established EdTech players with broader reach and deeper pockets. The regulatory environment in China also presents a significant factor for all competitors.
Growth Trajectory and Initiatives
Historical Growth: Youdao has demonstrated strong historical growth in revenue, driven by the expansion of its online education services and the introduction of intelligent learning hardware. The company has successfully transitioned from a search engine and dictionary provider to a comprehensive intelligent learning platform.
Future Projections: Future projections for Youdao are generally positive, driven by the sustained demand for quality education in China and the increasing adoption of technology in learning. Analysts anticipate continued revenue growth, with a focus on improving profitability as the company scales its operations and optimizes its cost structure. Key growth drivers include expanding its course offerings, enhancing its AI capabilities, and further developing its intelligent hardware ecosystem.
Recent Initiatives: Recent initiatives by Youdao include the enhancement of its AI-powered learning tools, the development of new intelligent hardware products, expansion of its K-12 and vocational training programs, and exploration of new market segments. The company has also been focusing on optimizing its operational efficiency and cost management.
Summary
Youdao Inc. is a prominent intelligent learning company in China, leveraging its strong brand, AI technology, and integrated offerings in online education and hardware. Its core strength lies in its diversified business model and its deep understanding of the Chinese market. However, it faces intense competition, regulatory uncertainties, and the need for continuous innovation to maintain its growth trajectory. The company's future success hinges on its ability to effectively scale its profitable segments and adapt to evolving market dynamics.
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Sources and Disclaimers
Data Sources:
- Company filings (SEC)
- Financial news outlets
- Industry analysis reports
- Market research data
Disclaimers:
This JSON output is an analytical overview based on publicly available information and should not be considered as financial advice. Market share data and financial performance figures are estimates and subject to change. Investors should conduct their own due diligence before making investment decisions.
AI Summarization is directionally correct and might not be accurate.
Summarized information shown could be a few years old and not current.
Fundamental Rating based on AI could be based on old data.
AI-generated summaries may have inaccuracies (hallucinations). Please verify the information before taking action.
About Youdao Inc
Exchange NYSE | Headquaters - | ||
IPO Launch date 2019-10-25 | CEO & Director Mr. Feng Zhou | ||
Sector Consumer Defensive | Industry Education & Training Services | Full time employees 3750 | Website https://www.youdao.com |
Full time employees 3750 | Website https://www.youdao.com | ||
Youdao, Inc., an internet technology company, provides online services in the fields of content, community, communication, and commerce in China. It operates through three segments: Learning Services, Smart Devices, and Online Marketing Services. The learning services mainly include tutoring services and fee-based premium services. The company provides various learning content, applications, and solutions, which cover topics and target people from various age groups for their learning needs through its websites and mobile applications. It also offers online knowledge tools, which include Youdao and other dictionaries and translation tools, as well as AI-based learning tools; STEAM courses through Youdao Premium Courses; adult courses through NetEase Cloud Classroom, such as foreign language, preparing for an exam, and picking up a new skill; and other courses consisting of China University MOOC courses. In addition, the company provides smart devices comprising Youdao Dictionary Pen, and Youdao Listening Pod, and Youdao Smart Learning Pad; education digitalization solutions, such as technologies and solutions licensed to schools or enterprise customers, including Youdao Smart Learning Terminal, Youdao Sports, and Youdao Smart Cloud; and online marketing services consisting of performance-based and brand advertising services. Further, it offers technical support to the variable interest entities (VIEs). The company was founded in 2006 and is headquartered in Hangzhou, China. Youdao, Inc. is a subsidiary of NetEase, Inc.
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