Youdao, Inc. Fundamental Analysis
Youdao, Inc. (DAO) shows weak financial fundamentals with a PE ratio of 134.73, profit margin of 1.16%, and ROE of -3.46%. The company generates $5.9B in annual revenue with moderate year-over-year growth of 3.56%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 32.4/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze DAO's fundamental strength across five key dimensions:
Efficiency Score
WeakDAO struggles to generate sufficient returns from assets.
Valuation Score
ModerateDAO shows balanced valuation metrics.
Growth Score
ModerateDAO shows steady but slowing expansion.
Financial Health Score
ModerateDAO shows balanced financial health with some risks.
Profitability Score
WeakDAO struggles to sustain strong margins.
Key Financial Metrics
Is DAO Expensive or Cheap?
P/E Ratio
DAO trades at 134.73 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, DAO's PEG of -0.38 indicates potential undervaluation.
Price to Book
The market values Youdao, Inc. at -4.81 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 58.37 times EBITDA. This signals the market has high growth expectations.
How Well Does DAO Make Money?
Net Profit Margin
For every $100 in sales, Youdao, Inc. keeps $1.16 as profit after all expenses.
Operating Margin
Core operations generate 3.04 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-3.46 in profit for every $100 of shareholder equity.
ROA
Youdao, Inc. generates $4.14 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Youdao, Inc. generates limited operating cash flow of $0.00, signaling weaker underlying cash strength.
Free Cash Flow
Youdao, Inc. generates weak or negative free cash flow of $0.00, restricting financial flexibility.
FCF Per Share
Each share generates $0.00 in free cash annually.
FCF Yield
DAO converts 0.00% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
134.73
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-0.38
vs 25 benchmark
P/B Ratio
Price to book value ratio
-4.81
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.56
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-0.89
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.52
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.03
vs 25 benchmark
ROA
Return on assets percentage
0.04
vs 25 benchmark
ROCE
Return on capital employed
-0.17
vs 25 benchmark
How DAO Stacks Against Its Sector Peers
| Metric | DAO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 134.73 | 21.43 | Worse (Expensive) |
| ROE | -3.46% | 1134.00% | Weak |
| Net Margin | 1.16% | -2810.00% (disorted) | Weak |
| Debt/Equity | -0.89 | 0.81 | Strong (Low Leverage) |
| Current Ratio | 0.52 | 2.39 | Weak Liquidity |
| ROA | 4.14% | -540348.00% (disorted) | Weak |
DAO outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Youdao, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
136.42%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
106.19%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
100.00%
Industry Style: Defensive, Dividend, Low Volatility
High Growth