Youdao (NYSE:DAO – Get Free Report) and WW International (NASDAQ:WW – Get Free Report) are both small-cap consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.
Analyst Recommendations
This is a summary of current ratings and price targets for Youdao and WW International, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Youdao | 1 | 0 | 1 | 0 | 2.00 |
| WW International | 1 | 1 | 1 | 0 | 2.00 |
Youdao presently has a consensus target price of $22.00, indicating a potential upside of 33.21%. WW International has a consensus target price of $25.00, indicating a potential upside of 67.11%. Given WW International’s higher probable upside, analysts plainly believe WW International is more favorable than Youdao.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Youdao | $6.01 billion | 0.33 | $15.35 million | $0.20 | 82.58 |
| WW International | $710.64 million | 0.21 | -$112.25 million | ($10.13) | -1.48 |
Youdao has higher revenue and earnings than WW International. WW International is trading at a lower price-to-earnings ratio than Youdao, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
21.9% of Youdao shares are owned by institutional investors. Comparatively, 86.2% of WW International shares are owned by institutional investors. 43.0% of Youdao shares are owned by company insiders. Comparatively, 0.4% of WW International shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Volatility and Risk
Youdao has a beta of 0.52, indicating that its share price is 48% less volatile than the S&P 500. Comparatively, WW International has a beta of 1.73, indicating that its share price is 73% more volatile than the S&P 500.
Profitability
This table compares Youdao and WW International’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Youdao | 2.71% | -8.46% | 8.78% |
| WW International | -56.84% | N/A | -0.32% |
Summary
Youdao beats WW International on 8 of the 12 factors compared between the two stocks.
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.
About WW International
WW International, Inc. provides weight management products and services worldwide. It offers a range of nutritional, activity, behavioral, and lifestyle tools and approaches products and services. The company also provides various digital subscription products to wellness and weight management business, which provide interactive and personalized resources that allow users to follow its weight management program through its app and web-based platform; and allows members to inspire and support each other by sharing their experiences with other people on weight health journeys. In addition, it licenses its trademarks and other intellectual property in food, beverages, and other relevant consumer products and services, as well as provides publishing services. The company was formerly known as Weight Watchers International, Inc. and changed its name to WW International, Inc. in September 2019. WW International, Inc. was founded in 1961 and is headquartered in New York, New York.
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