Comparing KinderCare Learning Companies (NYSE:KLC) and Youdao (NYSE:DAO)

KinderCare Learning Companies (NYSE:KLC) and Youdao (NYSE:DAO) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Profitability

This table compares KinderCare Learning Companies and Youdao’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KinderCare Learning Companies	-17.23%	6.65%	1.21%
Youdao	2.71%	-8.46%	8.78%

Risk and Volatility

KinderCare Learning Companies has a beta of 4, meaning that its share price is 300% more volatile than the S&P 500. Comparatively, Youdao has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500.

Earnings & Valuation

This table compares KinderCare Learning Companies and Youdao”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KinderCare Learning Companies	$2.73 billion	0.11	-$112.88 million	($3.98)	-0.64
Youdao	$822.04 million	2.40	$15.35 million	$0.20	81.97

Youdao has lower revenue, but higher earnings than KinderCare Learning Companies. KinderCare Learning Companies is trading at a lower price-to-earnings ratio than Youdao, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for KinderCare Learning Companies and Youdao, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KinderCare Learning Companies	4	5	1	0	1.70
Youdao	1	0	1	0	2.00

KinderCare Learning Companies currently has a consensus price target of $4.13, indicating a potential upside of 62.22%. Youdao has a consensus price target of $22.00, indicating a potential upside of 34.19%. Given KinderCare Learning Companies’ higher probable upside, research analysts plainly believe KinderCare Learning Companies is more favorable than Youdao.

Institutional and Insider Ownership

21.9% of Youdao shares are held by institutional investors. 5.8% of KinderCare Learning Companies shares are held by insiders. Comparatively, 43.0% of Youdao shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Youdao beats KinderCare Learning Companies on 9 of the 13 factors compared between the two stocks.

About KinderCare Learning Companies

KinderCare Learning Companies Inc. is a provider of high-quality early childhood education by center capacity. KinderCare Learning Companies Inc. is based in PORTLAND, Ore.

About Youdao

Youdao, Inc., an internet technology company, provides online services in the field of content, community, communication, and commerce in China. It operates through three segments: Learning Services, Smart Devices, and Online Marketing Services. The company provides various learning content, applications, and solutions, which cover topics and target people from various age groups for their learning needs through its websites and mobile applications. It offers online knowledge tools, which include Youdao and other dictionaries and translation tools; learning services consisting of tutoring, fee-based premium, and other services; STEAM courses, adult and vocational courses, and other courses, such as China University MOOC; smart devices, such as Youdao Dictionary Pen, Youdao Listening Pod, Youdao Smart light, Youdao Pocket Translator, and Youdao Super Dictionary; education digitalization solutions comprising technologies and solutions licensed to schools or enterprise customers, such as Youdao Smart Learning Terminal, Youdao Sports, and Youdao Smart Cloud; and online marketing services. In addition, the company provides online courses comprising Youdao Premium Courses and NetEase Cloud Classroom, as well as technical support to the variable interest entities (VIEs). Youdao, Inc. was founded in 2006 and is headquartered in Hangzhou, China. Youdao, Inc. is a subsidiary of NetEase, Inc.