Youdao Inc. (NYSE: DAO) Is Getting Increasingly Hard To Ignore

DE Stock
DE Stock

Orbis Investment Management Ltd. recently announced the acquisition of new stake in Youdao Inc. (NYSE:DAO). The institutional investor has increased its shareholding in the Communication Services company by 3.78% to 8.26 million shares with purchase of 0.3 million shares. This fresh investment now brings its stake to 36.48% valued currently at $349.31 million. In addition, Sylebra Capital Ltd. raised its holdings by 1.17 million to 1.17 million shares. And Shanghai Greenwoods Asset Managem.. has lifted its position by 67.06% or 0.41 million shares – to 1.03 million shares.

With over 1.2 million Youdao Inc. (DAO) shares trading Tuesday and a closing price of $32.24 on the day, the dollar volume was approximately $38.75 million. The shares have shown a negative weekly performance of -3.12% and its price on 09/01/20 gained nearly 8.41%. Currently, there are 111.77M common shares owned by the public and among those 19.99M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 9 analysts who have offered their price forecasts for DAO have a consensus price objective of $295.75. The analysts have set the share’s price value over the next 12 months at a high of $333.33 and a low of $170.04 should the stock experience a downside. Incidentally, analysts’ outlook for the Youdao Inc. stock is 1.70 for the next 12 months. The average price target is 21.44% above its last price level and an upside to the estimated low will see the stock gain 81.04% over that period. But an upside of 90.33% will see the stock hit the forecast high price target while mean target price for the stock is $316.66.

The top 3 mutual fund holders in Youdao Inc. are CS Invt. Fds. 2 – (Lux) Edutainme, KraneShares CSI China Internet ET, and Government Pension Fund – Global. CS Invt. Fds. 2 – (Lux) Edutainme owns 0.8 million shares of the company’s stock, all valued at over $33.85 million. The company bought an additional 0.8 million shares recently to bring their total holdings to about 3.53% of the shares outstanding. KraneShares CSI China Internet ET sold 819.0 shares to see its total holdings shrink to 0.22 million shares valued at over $9.28 million and representing 0.97% of the shares outstanding. Government Pension Fund – Global bought 0.15 million shares to bring its total holdings to over 0.15 million shares at a value of $6.35 million. Government Pension Fund – Global now owns shares totaling to 0.66% of the shares outstanding.

Shares of Youdao Inc. (NYSE: DAO) opened at $30.80, up $1.06 from a prior closing price of $29.74. However, the script later closed the day at $32.24, up 8.41%. The company’s stock has a 5-day price change of -3.12% and 29.06% over the past three months. It has a 12-month low price of $12.01 and touched a high of $47.70 over the same period. Currently, 1.2 million shares have been traded, compared to an average intraday trading volume of 378.83K shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by -13.44%, -14.75%, and 33.51% respectively.

Institutional ownership of Youdao Inc. (NYSE: DAO) shares accounts for 58.80% of the company’s 111.77M shares outstanding. Mutual fund holders own 5.67%, while other institutional holders and individual stakeholders account for 55.87% and — respectively.

It has a market capitalization of $3.71B. The earnings-per-share (ttm) stands at -$1.59. Price movements for the stock have been influenced by the stock’s volatility, which stands at 6.78% over the week and 7.75% over the month.

Analysts forecast that Youdao Inc. (DAO) will achieve an EPS of -$0.47 for the current quarter, -$0.3 for the next quarter and -$0.72 for 2021. The lowest estimate earnings-per-share for the quarter is -$0.6 while analysts give the company a high EPS estimate of -$0.35. Earnings per share for the fiscal year are expected to decrease by -212.00%, and 45.90% over the next financial year.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 9 brokerage firm advisors rate Youdao Inc. (DAO) as a “Strong Buy” at a consensus score of 1.70. Specifically, 7 Wall Street analysts polled rate the stock as a buy, while 2 of the 9 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the DAO, a number of firms have released research notes about the stock. Morgan Stanley stated their Equal-Weight rating for the stock in a research note on August 14, 2020, with the firm’s price target at $39. HSBC Securities coverage for the Youdao Inc. (DAO) stock in a research note released on March 12, 2020 offered a Buy rating with a price target of $28.


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