DAO Should I Buy
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Youdao Inc (DAO) is not a strong buy at the moment for a beginner investor with a long-term horizon. While there are some positive catalysts, such as the analyst upgrade and revenue growth, the lack of significant trading signals, weak financial performance in terms of net income and EPS, and neutral technical indicators suggest that the stock does not present a compelling entry point right now.
The MACD is below 0 and negatively contracting, indicating a lack of bullish momentum. RSI is neutral at 58.348, and moving averages are converging, showing no clear trend. The stock is trading near its pivot point of 9.874, with resistance at 10.319 and support at 9.429. Overall, the technical indicators suggest a neutral trend.
Citi upgraded the stock to Buy with a price target of $12, citing stronger-than-expected learning services and advertising revenue. Revenue grew 16.79% YoY in Q4 2025.
Gross margin also decreased by 5.73%. No significant insider or hedge fund activity, and no recent news or congress trading data.
In Q4 2025, revenue increased by 16.79% YoY to 1.56 billion, but net income dropped by 41.87% YoY to 48.25 million. EPS fell by 42.03% YoY to 0.4, and gross margin declined to 45.08%, down 5.73% YoY. Financial performance shows mixed results with growth in revenue but significant declines in profitability.
Citi upgraded the stock to Buy from Neutral, raising the price target to $12 from $9.90. Analysts highlight decent Q4 results and expect growth in learning services to recover to the teens level this year.
