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 strategy. While the stock has some positive indicators such as bullish moving averages and a recent analyst upgrade, the lack of strong trading signals, mixed financial performance, and absence of significant catalysts suggest holding off on immediate investment.
The technical indicators show a bullish trend with MACD histogram above 0 and expanding positively, RSI in the neutral zone at 57.735, and moving averages in a bullish alignment (SMA_5 > SMA_20 > SMA_200). Key resistance levels are at 10.418 and 10.614, while support levels are at 9.784 and 9.588.
Recent analyst upgrade by Citi with a price target increase to $12, citing stronger-than-expected learning services and advertising revenue. Decent momentum in AST and management's expectation of growth recovery in learning services to teens level.
No significant news or trading trends from hedge funds, insiders, or Congress. Financial performance shows a YoY decline in net income (-41.87%), EPS (-42.03%), and gross margin (-5.73%).
In Q4 2025, revenue increased by 16.79% YoY to 1.56 billion, but net income dropped significantly by 41.87% YoY to 48.25 million. EPS also declined by 42.03% YoY to 0.4, and gross margin fell by 5.73% YoY to 45.08%.
Citi upgraded the stock to Buy from Neutral with a price target of $12, up from $9.90. Analysts highlighted strong performance in learning services and advertising, offset by weak smart devices. Management expects growth recovery in learning services to teens level.
