Zentek (NASDAQ:ZTEK – Get Free Report) and Youdao (NYSE:DAO – Get Free Report) are both small-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.
Analyst Ratings
This is a summary of current ratings and target prices for Zentek and Youdao, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Zentek | 1 | 0 | 0 | 0 | 1.00 |
| Youdao | 1 | 0 | 1 | 0 | 2.00 |
Volatility and Risk
Zentek has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, Youdao has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Zentek | $630,000.00 | 92.05 | -$7.22 million | ($0.05) | -10.76 |
| Youdao | $5.68 billion | 0.20 | $14.93 million | $0.13 | 72.93 |
Youdao has higher revenue and earnings than Zentek. Zentek is trading at a lower price-to-earnings ratio than Youdao, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Zentek and Youdao’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Zentek | -875.49% | -60.84% | -45.12% |
| Youdao | 1.81% | -6.41% | 7.16% |
Institutional and Insider Ownership
0.8% of Zentek shares are held by institutional investors. Comparatively, 21.9% of Youdao shares are held by institutional investors. 43.0% of Youdao shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Summary
Youdao beats Zentek on 12 of the 13 factors compared between the two stocks.
About Zentek
Zentek Ltd., together with its subsidiaries, engages in the research and development of graphene and related nanomaterials in Canada. The company develops graphene-based antimicrobial coating under the ZenGUARD brand, surgical masks, HVAC filters, personal protective equipment, rapid detection point of care diagnostics tests, and pharmaceutical products based on graphene-based compounds. It is also developing graphene oxide synthesis and graphene synthesis. In addition, the company owns 100% interest in the Albany graphite project located in Northern Ontario, Canada. The company was formerly known as ZEN Graphene Solutions Ltd. and changed its name to Zentek Ltd. in October 2021. Zentek Ltd. was incorporated in 2008 and is headquartered in Guelph, Canada.
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.
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