Financial Analysis: Youdao (NYSE:DAO) vs. Wah Fu Education Group (NASDAQ:WAFU)

Youdao (NYSE:DAO) and Wah Fu Education Group (NASDAQ:WAFU) are both business services companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, profitability, earnings, dividends, valuation, risk and analyst recommendations.

Profitability

This table compares Youdao and Wah Fu Education Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Youdao -44.76% N/A -48.13%
Wah Fu Education Group N/A N/A N/A

Insider and Institutional Ownership

11.6% of Youdao shares are held by institutional investors. Comparatively, 0.5% of Wah Fu Education Group shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and price targets for Youdao and Wah Fu Education Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Youdao 1 2 4 0 2.43
Wah Fu Education Group 0 0 0 0 N/A

Youdao presently has a consensus target price of $33.67, suggesting a potential upside of 7.29%. Given Youdao’s higher possible upside, equities research analysts clearly believe Youdao is more favorable than Wah Fu Education Group.

Earnings and Valuation

This table compares Youdao and Wah Fu Education Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Youdao $184.14 million 19.05 -$86.40 million ($0.94) -33.38
Wah Fu Education Group $5.64 million 3.39 -$1.69 million N/A N/A

Wah Fu Education Group has lower revenue, but higher earnings than Youdao.

Summary

Youdao beats Wah Fu Education Group on 5 of the 8 factors compared between the two stocks.

About Youdao

Youdao, Inc., an internet technology company, provides online services in content, community, communication, and commerce in China. The company provides various learning content, applications, and solutions, which covers topics and targets people from various age groups for their learning needs through its websites and mobile applications; Youdao Dictionary with range of products and services addressing lifelong learning needs of pre-school, K-12 and college students as well as adult learners; Youdao Cloudnote, an independent notetaking tool that offers a suite of features for users to make a note of their ideas and inspirations anytime and anywhere; and other online dictionary and translation tools comprising Youdao Translation, U-Dictionary, and Youdao Kids' Dictionary. It also offers smart devices, such as Youdao Smart Pen, Youdao Dictionary Pen, and Youdao Pocket Translator. The company provides learning services and products primarily include online courses, fee-based premium services, and others, as well as online marketing services; technical support to the VIEs; and consulting services; Youdao, Inc. was founded in 2006 and is headquartered in Hangzhou, China. Youdao, Inc. operates as a subsidiary of NetEase, Inc.

About Wah Fu Education Group

Wah Fu Education Group Limited, through its subsidiaries, provides online exam preparation services and related technology solutions in the People's Republic of China. The company operates in two segments, Online Education Services; and Technological Development and Operation Services. The Online Education Services segment offers online education platforms to institutions, such as universities and training institutions, and online course development service companies. This segment provides self-study examination, continuing education, and non-diploma training platforms that allow students to enroll in courses for college credit; vocational education 1+X and higher vocational enrollment expansion teaching and educational administration platform; Huafu e-school system and paperless examination platform; and online training and examination preparation services directly to students. The Technological Development and Operation Services segment develops and maintains online education platforms and online courses for its clients, including universities and government agencies, as well as private clients, such as publishers; and provides consulting, maintenance, and updating services related to online education programs. Wah Fu Education Group Limited was founded in 1999 and is headquartered in Beijing, the People's Republic of China.

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