Youdao (NYSE:DAO) Posts Earnings Results, Meets Estimates

Youdao (NYSE:DAO) announced its quarterly earnings results on Thursday. The company reported $0.05 earnings per share (EPS) for the quarter, meeting analysts’ consensus estimates of $0.05, FiscalAI reports. Youdao had a negative return on equity of 6.41% and a net margin of 1.81%.The business had revenue of $195.52 million for the quarter, compared to the consensus estimate of $201.43 million.

Here are the key takeaways from Youdao’s conference call:

• Youdao posted RMB 1.3 billion in Q1 revenue, up 3.8% year over year, while operating profit was RMB 57.5 million, marking the company’s 7th consecutive quarter of operating profitability.
• Management said AI remains the core growth strategy, highlighted by new launches including Confucius 4, EmotiVoice 2, and Confucius Translation 4, alongside new AI applications like LobsterAI and Youdao Baoku.
• Learning services grew to RMB 627.5 million in revenue, supported by Youdao Lingshi gross billings growth of over 20% and early traction for AI Essay Grading, which has graded about 10,000 essays to date.
• Online marketing services was the standout segment, with revenue up 20.9% year over year to RMB 611.1 million and gross margin improving to 39.6%, driven by performance advertising and AI-enabled products.
• Smart devices revenue fell sharply by 42.6% year over year to RMB 109.4 million, as management continued to prioritize inventory discipline and profitability over near-term volume growth.

Youdao Price Performance

Youdao stock opened at $12.48 on Thursday. The stock has a market capitalization of $1.50 billion, a price-to-earnings ratio of 95.98 and a beta of 0.57. Youdao has a 1-year low of $8.00 and a 1-year high of $13.04. The business has a fifty day moving average price of $10.71 and a 200-day moving average price of $10.33.

Institutional Trading of Youdao

An institutional investor recently raised its position in Youdao stock. Public Employees Retirement System of Ohio lifted its holdings in Youdao, Inc. Unsponsored ADR (NYSE:DAO) by 35.9% in the third quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The institutional investor owned 29,286 shares of the company’s stock after purchasing 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. 21.91% of the stock is currently owned by hedge funds and other institutional investors.

Analyst Ratings Changes

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

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.