Stock fact sheet · data as of
Youdao, Inc. (DAO): fair value, margin of safety and Wheel Score
Consumer Defensive · Education & Training Services · China · ADR · Blend
Is DAO undervalued?
DAO closed at 18.51 on 16 Oct 2026, more than 30% above the GLS average fair value of 12.84. Only 1 of the 5 models that produced a value sit above the price. By our models the shares are priced well beyond what the filed earnings, cash flow and book value support; the Sunday Scan drops names like this at the "below fair value" rule.
The 5 models disagree widely: EPV gives 2.24 while DCF gives 33.36. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files DAO under Blend.
Nine valuation models for DAO
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 33.36 | +80% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | - | - | The most a defensive investor pays for the earnings and book value per share; no value tonight |
| Graham Growth | 11.55 | -38% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 5.05 | -73% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 11.98 | -35% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | - | - | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10%; no value tonight |
| Payback Time | - | - | Eight years of compounded free cash flow: the price at which the business pays for itself; no value tonight |
| DDM | - | - | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend; no value tonight |
| EPV | 2.24 | -88% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -18.77 | -201% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 6.50 | -65% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is average - DAO passes 5 of the nine Piotroski tests, which falls one point short of the Sunday Scan's "6 or more" rule. The Financials tab on the Quote page shows which tests fail. The GLS Moat score is low at 1.9 out of 10, which says the ten-year record of revenue, earnings, margins and returns on capital has been inconsistent - growth and shocks rather than steady compounding.
Returns on capital are thin or negative - ROIC -83.7%, ROE -5.4%, ROA 5.4% - with debt at -0.94 times equity and negative free cash flow.
Youdao, Inc. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Learning Services 31%, Online Marketing Services 30%, Tutoring Services 24% (fiscal year FY2025).
Institutional ownership scores 1/10, insider activity 10/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 5 / 9 | ROIC | -83.7% |
|---|---|---|---|
| GLS Moat | 1.9 / 10 | ROE | -5.4% |
| Debt / equity | -0.94 | ROA | 5.4% |
| Free-cash-flow yield | 0.0% | Payout ratio | 0% |
| Institutions | 1 / 10 | Insiders · Congress | 10 · 5 / 10 |
Wheel Score 39: Weak
DAO scores 39 out of 100 on the Wheel Score, in the Weak band (under 50). Value 0/25, Health 11/20, Moat 3/15, Premium 15/20, Stability 9/20. The score is not a judgement on the company; it says the price, quality and premium do not line up for selling puts on it today.
Implied volatility is 79% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (15 of 20) because volatility this high usually comes with a reason. Chain open interest is thin - 455 contracts across every expiry - so fills at a fair price are not guaranteed; a 30-45-day put may not exist at a usable strike.
Volume runs at 37k shares a day on a market cap of $2.2B, with a beta of 0.52 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 9 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 0 / 25 | -44% margin of safety | |
| Health | 11 / 20 | Piotroski 5/9 | |
| Moat | 3 / 15 | moat 1.9/10 | |
| Premium | 15 / 20 | implied volatility 79% | |
| Stability | 9 / 20 | 37k shares/day, $2.2B cap, beta 0.52 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 12 Nov 2026 (before the open), 27 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Education & Training Services
The 12 companies below are the closest to Youdao, Inc. by market cap within the Education & Training Services industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| PRDO Perdoceo Education Corporation | 33.55 | 48.56 | +31% | 87Prime | $2.1B |
| STRA Strategic Education, Inc. | 80.97 | 180.97 | +55% | 83Prime | $1.8B |
| MH McGraw Hill, Inc. | 14.20 | 26.91 | +47% | 76Good | $2.7B |
| COUR Coursera, Inc. | 5.09 | 9.88 | +48% | 45Weak | $1.3B |
| LRN Stride, Inc. | 83.18 | 245.69 | +66% | 85Prime | $3.5B |
| AFYA Afya Limited | 14.52 | 85.46 | +83% | 66Good | $1.3B |
| UTI Universal Technical Institute, Inc. | 20.31 | 18.31 | -11% | 66Good | $1.1B |
| LOPE Grand Canyon Education, Inc. | 161.43 | 166.55 | +3% | 72Good | $4.2B |
| CVSA Covista Inc. | 127.24 | 235.79 | +46% | 89Prime | $4.3B |
| GOTU Gaotu Techedu Inc. | 2.67 | 16.70 | +84% | 45Weak | $962M |
| APEI American Public Education, Inc. | 49.13 | 74.71 | +34% | 78Good | $899M |
| LAUR Laureate Education, Inc. | 39.04 | 63.72 | +39% | 86Prime | $5.4B |
⚖ Compare DAO with 7 of them All Consumer Defensive stocks →
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A free GLS Equity account gets you nightly fair value and the Wheel Score on ~7,400 US stocks, a watchlist, the scanner preview and the Sunday Scan - the same eight-rule screen, emailed every week. Pro adds the full put and call scanners, unlimited watchlists with alerts and the trade journal.
Start free See the Sunday ScanQuestions about DAO
Is DAO undervalued right now?
No: at 18.51 the stock trades 44% above the GLS average fair value of 12.84 (data as of 16 Oct 2026), well beyond what trailing earnings, cash flow and book value support.
What is the Wheel Score of DAO and what does it mean?
DAO scores 39 out of 100 (Weak). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for DAO?
12.84 per share as of 16 Oct 2026 - the simple average of the 5 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Youdao, Inc. report earnings next?
The next earnings report is due on 12 Nov 2026 (before the open), 27 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does DAO have listed options, and how liquid are they?
Yes. The nightly snapshot found 90 listed contracts with 455 open interest across all expiries and implied volatility of 79% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.