$Youdao(DAO)$ here's why I think at $8.80 it's a value find!
Why YOUDAO Is a Compelling Buy & What Fuels Its Business Model
1. Business Model – Multi‑Pronged & AI‑Driven
Three core segments: Learning Services, Smart Devices, Online Marketing Services
It's AI Subscriptions: A standout growth driver. AI‑powered services such as Youdao Dictionary and Interpreter subscriptions generated over RMB 200 million in sales in 2024—a 130% year-over-year leap + its SpaceOne dictionary pen
Technological Innovation with “AI Native” Strategy:
Youdao is embedding AI deeply across its offerings, leveraging proprietary large language models (Ziyue, DeepSeek‑R1) to power tutoring, translation, smart devices, and ad automation
2. Why is it compelling?
First ever full year profitability in 2024; strong retention metrics and "stick ability" In product suites, diversified revenue streams, strong backer-- NETEASE is the parent company.
More importantly, we saw how Duolingo has soared today, I think as part of the ripple effect, it will also benefit in the short term... In trading. I think the trend is our friend!
Long term wise, I like it for the potential listed above
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The online education market in China is projected to grow significantly, with an estimated CAGR of 20.9% from 2025 to 2028. This growth is bolstered by increasing internet penetration, a rising middle-class demographic, and a growing emphasis on lifelong learning.
Youdao's alignment with these market trends positions it favorably for future growth, with expectations of expanding its product lines and improving its technology base to meet evolving consumer needs.
It’s reporting earnings this 14 August. If they beat expectations? That’s where we could see a short term rally. I like this stock but I’m also painfully aware that if I were to make money from it, I would buy at 8.68 regions and there should be 10% upside from here to 9.60 (Citi price target).,.as a long term hold, we could see prices lifted but it would take a while s China transform the Ed tech industry.