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Youdao, Inc.
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$2.3B
Market Cap
78.4
P/E
—
PEG
8.9%
ROCE
-4.8%
ROE
-0.95
D/E
3.7%
OPM
-5.1%
% from 52W High
91
α RS
🔍 DAO is showing a multi-screen setup because it matches 3 of 39 tracked screener presets, Sector RRG has Consumer Staples in the Leading quadrant with the trail still strengthening, RS Rating is 91 (top decile vs market), and it has maintained a 24-day Stage 2 momentum persistence. Net: Broad signal stack, not a recommendation. ? Conviction RRG RS Rating Momentum Streaks
Sources
Conviction 3/39 · Consumer Staples in Leading quadrant · RS Rating 91 · Stage 2 streak: 24d
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🌏 Global Investor Returns
Currency-adjusted total returns for DAO including FX impact
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📈 Price History
Ratio Health
— Excellent
— Good
— Average
— Poor
By Category
📊 Peer Medians
About

Youdao, Inc., an internet technology company, provides online services in the fields of content, community, communication, and commerce in the People’s Republic of China. It operates through three segments: Learning Services, Smart Devices, and Online Marketing Services. The Learning Services segment offers digital content services, which provides interactive learning features, such as Youdao Lingshi; STEAM courses, including Youdao iCode operated by Youdao Premium Courses; and adult courses comprising China University MOOC. The Smart Devices segment develops and offers smart devices, such as Youdao Dictionary Pen, Youdao Tutoring Pen, and Youdao Smart Learning Terminal. The Online Marketing Services Segment provides performance-based advertising, and global marketing and promotion services. It also offers Youdao Dictionary, a language app; other dictionary and translation tools; and AI-based learning tools, including Hi Echo, Mr. P AI Tutor and Scholar AI by Confucius LLM. In addition, the company licenses technologies and services through Youdao Smart Cloud. It provides learning content, applications, and solutions, which cover topics and target people from age groups through its websites and mobile applications. Youdao, Inc. was founded in 2006 and is headquartered in Hangzhou, China. Youdao, Inc. operates as a subsidiary of NetEase, Inc.

Key Ratios Snapshot
📈 Growth Pattern
📊 Quick Scorecard
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Manager Shares Value % of Fund Period
Jim Simons Renaissance Technologies LLC 63.5K $624K 0.00% Mar 2026

SEC Form 13F data. 45-day lag from quarter end.

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📊 MIXED Youdao Q1 2026: Revenue RMB 1.3B, up 3.8% YoY; operating profit 7th consecutive quarter
Revenue & Profitability
Q1 2026 net revenues were RMB 1.3 billion ($195.4M), up 3.8% YoY. Operating profit was RMB 57.5M with a 4.3% margin. Net income attributable to ordinary shareholders was RMB 38.6M ($5.6M), down from RMB 76.7M in Q1 2025. Non-GAAP net income was RMB 44.9M ($6.5M), down from RMB 81.7M. Net operating cash outflow narrowed 63.6% YoY to RMB 93.1M.
Outlook
Management expressed confidence in the long-term prospects for AI applications in education, productivity, and advertising. Tailwinds include policy support for high school education expansion (2 million new seats during the 15th Five-Year Plan) and explosive growth in AI chat and AI coding. No headwinds were explicitly discussed, but the company noted a high comparison base from restructuring of learning services last year.
Growth Drivers
Key growth drivers include AI-powered learning services: Youdao Lingshi gross billings grew over 20% YoY, and AI subscription services exceeded RMB 100M in sales (up 70% YoY). Online marketing services grew 20.9% YoY, driven by performance-based advertising in gaming, AI applications, and short-form dramas. AI simultaneous interpretation sales grew over 100% YoY for the second consecutive quarter. Scholar AI saw over 200% YoY sales growth.
Balance Sheet & CapEx
Not discussed in this earnings call. The transcript mentions proactive investments in AI and the release of new models and products, but no specific CapEx guidance or capacity plans were provided.
Margins
Operating margin was 4.3% in Q1 2026, up 0.5 percentage points sequentially but down from 8% in Q1 2025 due to proactive investments in AI and a high comparison base. Gross margin for learning services was 60.2% (stable YoY), smart devices was 39.9% (down from 52.3% YoY), and online marketing services was 39.6% (up from 30.5% YoY). The company expects operating profit to return to historical norms with H2 outperforming H1 in 2026.
Key Risks
Not explicitly discussed beyond standard forward-looking statement disclaimers about risks, uncertainties, and assumptions. No specific risks were raised by management or analysts in the Q&A session.
Generated by AI · Q1 2026 results · Not investment advice
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✓ 📞 Earnings Call Transcripts (5 quarters) submit a missing quarter
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📞 Earnings Call Transcripts (5)
Q1 2026 Q1 2026 2026-05-21
Q1 2026 saw 3.8% revenue growth to RMB 1.3 billion, with strong AI-driven innovation and robust online marketing services up 20.9% year-over-year. Operating margin improved sequentially, and management expects continued profitability and cash flow gains in 2026.
Q4 2025 Q4 2025 2026-02-11
Q4 and full year 2025 saw strong revenue and operating profit growth, with learning services and online marketing segments leading gains. AI-driven innovation and international expansion fueled performance, while 2026 guidance targets double-digit growth and continued investment in AI applications.
Q3 2025 Q3 2025 2025-11-20
Q3 2025 saw 3.6% revenue growth to RMB 1.6B, led by online marketing services (+51.1% YoY), while learning services and smart devices declined. Operating profit fell due to increased investment, but full-year profit and cash flow break-even targets remain on track.
Q2 2025 Q2 2025 2025-08-14
Q2 saw a return to profitability with 7.2% revenue growth, strong gains in learning and advertising, and improved margins from cost controls. AI-driven products and services fueled segment growth, while new launches and buybacks support future momentum.
Q1 2025 Q1 2025 2025-05-15
Q1 2025 saw record operating income and a sharp rise in net income, despite a revenue decline driven by learning services. AI-driven product innovation and cost optimization boosted margins, with strong growth in digital content, smart devices, and online marketing.
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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This analysis does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a licensed financial advisor or an SEC-registered investment adviser before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Information Sources:
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