Head-To-Head Survey: WW International (NASDAQ:WW) and Youdao (NYSE:DAO)

WW International (NASDAQ:WW) and Youdao (NYSE:DAO) are both small-cap consumer discretionary companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Analyst Recommendations

This is a breakdown of current ratings for WW International and Youdao, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
WW International	1	1	1	0	2.00
Youdao	1	0	1	0	2.00

WW International presently has a consensus price target of $25.00, indicating a potential upside of 69.61%. Youdao has a consensus price target of $22.00, indicating a potential upside of 47.21%. Given WW International’s higher probable upside, equities research analysts plainly believe WW International is more favorable than Youdao.

Institutional and Insider Ownership

86.2% of WW International shares are owned by institutional investors. Comparatively, 21.9% of Youdao shares are owned by institutional investors. 0.4% of WW International shares are owned by company insiders. Comparatively, 43.0% of Youdao shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares WW International and Youdao”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
WW International	$710.64 million	0.21	-$112.25 million	($10.13)	-1.46
Youdao	$822.04 million	2.19	$15.35 million	$0.20	74.72

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.

Risk & Volatility

WW International has a beta of 1.73, meaning that its stock price is 73% more volatile than the S&P 500. Comparatively, Youdao has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500.

Profitability

This table compares WW International and Youdao’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
WW International	-56.84%	N/A	-0.32%
Youdao	2.71%	-8.46%	8.78%

Summary

Youdao beats WW International on 8 of the 12 factors compared between the two stocks.

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.

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.