Youdao (NYSE:DAO) has recently announced a significant milestone, with its AI simultaneous interpretation tool surpassing 20 million cumulative users—a nearly 60% increase in September. This surge highlights strong adoption among college students and foreign trade professionals amid growing demand for digital learning technologies. Youdao’s stock performance reflects this momentum, boasting a 127.1% total shareholder return over the year and a 53% year-to-date gain. Analysts suggest the stock is undervalued at $10.97, with a fair value estimated at $13.04, driven by its advancements in AI-powered education tools like personalized learning systems and AI tutors. However, concerns linger regarding shrinking gross profit margins and valuation risk due to a high P/E ratio of 40.9, compared to industry averages. Investors should closely monitor these factors to gauge sustainable growth potential. Explore our analysis and uncover investment opportunities while considering market dynamics and risks.
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