DAO Should I Buy
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Youdao Inc (DAO) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The stock has positive technical indicators, a recent analyst upgrade with a higher price target, and potential for growth in its learning services segment. Despite weaker financial performance in Q4 2025, the company's revenue growth and adjusted earnings beat consensus, suggesting recovery potential.
The MACD is positive and expanding (0.121), indicating bullish momentum. RSI is neutral at 67.03, and moving averages are bullish (SMA_5 > SMA_20 > SMA_200). The stock is trading near resistance levels (R1: 10.396, R2: 10.812), showing potential for a breakout.
Citi upgraded the stock to Buy with a price target of $12, citing strong Q4 results and expected growth in learning services.
Bullish technical indicators support a positive price trend.
Q4 2025 financials showed a significant drop in net income (-41.87%) and EPS (-42.03%).
Gross margin declined by 5.73%, indicating potential cost pressures.
In Q4 2025, revenue increased by 16.79% YoY, but net income and EPS dropped significantly (-41.87% and -42.03%, respectively). Gross margin also declined to 45.08%, down 5.73% YoY.
Citi upgraded Youdao to Buy from Neutral with a price target of $12, up from $9.90. Analysts highlighted strong Q4 results and expected recovery in learning services growth to teens level in 2026.
