Youdao, Inc. (NYSE: DAO), an intelligent learning company in China, saw its stock plummet by 5.28% in Thursday's intraday trading. The sell-off comes amidst concerns over the company's revenue growth outlook and analysts' downward revisions to their forecasts.
According to a recent report by Simply Wall St, Youdao's revenue growth has been sluggish compared to its industry peers. While the company's revenue grew by a decent 7.5% in the last year, analysts expect its revenue growth to slow to 10% in the next year, falling short of the industry's projected 13% growth.
The report also highlighted that Youdao's price-to-sales ratio of 1.3x is currently in line with the industry median, despite its relatively weaker revenue outlook. This has raised concerns among investors that the company's stock may be overvalued, leading to the sharp sell-off on Thursday.