Youdao, Inc. Unsponsored ADR (DAO) vs Gaotu Techedu Inc. (GOTU)

Youdao, Inc. Unsponsored ADR and Gaotu Techedu Inc. are both Education & Training Services companies. Youdao, Inc. Unsponsored ADR is the larger, with a market value of $475.4M against $304.0M — 1.6× the size. Gaotu Techedu Inc. has negative trailing earnings, so its P/E is not meaningful; Youdao, Inc. Unsponsored ADR trades at 73.8×. Gaotu Techedu Inc. grew revenue faster over the last twelve months: 28.8% against 13.8%. Youdao, Inc. Unsponsored ADR has the higher net margin (2.70% vs −4.97%) and the higher return on invested capital (0.00% vs 0.00%). Across the 15 metrics below, Youdao, Inc. Unsponsored ADR leads on 8 and Gaotu Techedu Inc. on 7.

Valuation

Metric DAO GOTU Education & Training Services median
P/E 73.80 n/m 11.19
P/S 1.99 0.56 0.92
P/B n/m 3.55 1.63
Price to free cash flow n/m 7.47 9.62
EV/EBITDA 49.35 n/m 7.02
EV/Sales 2.14 0.14 0.82
Earnings yield 1.36% (8.54%) 3.17%
Free cash flow yield (9.54%) 13.39% 2.30%

Profitability

Metric DAO GOTU Education & Training Services median
Gross margin 45.18% 67.54% 54.64%
Operating margin 4.33% (6.60%) 0.00%
Net margin 2.70% (4.97%) 3.29%
Free cash flow margin 0.00% 0.00% 0.00%
Return on equity 0.00% (25.49%) 0.00%
Return on assets 8.70% (5.51%) 0.00%
Return on invested capital 0.00% 0.00% 0.00%

Growth

Metric DAO GOTU Education & Training Services median
Revenue growth (TTM) 13.83% 28.79% 6.97%
EPS growth (last fiscal year) 30.00% 66.07% —
Revenue growth, 5-year CAGR 11.72% (4.25%) 4.27%
Net income growth, 5-year CAGR 0.00% 0.00% 0.00%

Health

Metric DAO GOTU Education & Training Services median
Debt to equity (0.93) 0.51 0.08
Current ratio 0.58 0.86 1.33
Net debt to EBITDA 4.35 8.43 (0.15)

Dividend

Metric DAO GOTU Education & Training Services median
Dividend yield — — 1.13%
Payout ratio 0.00 0.00 0.00

Size

Metric DAO GOTU Education & Training Services median
Market cap 475.38m 303.99m 68.93m

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