China-based internet technology company Youdao’s (DAO) shares have plunged in price amid strict regulations placed on the education industry by Chinese authorities in recent months. However, the company’s revenue grew across all its major segments in its last reported quarter. So, is it wise to buy the dip in the stock? Read on.Headquartered in Hangzhou, China, Youdao, Inc. (NYSE:DAO) is a leading intelligent learning company that develops and uses technologies to provide learning content, applications, and solutions for users of all ages. The stock was added to the MSCI China All Shares Small Cap Index on November 30. The company reported revenue growth across all major categories in the third quarter. However, the stock has declined 50.9% in price over the past six months and 28.3% over the past month to close yesterday’s trading session at $11.28.
It hit its all-time low of $7.02 on July 27, 2021, in part because that month the Chinese authorities stepped up restrictions on the education industry. China’s crackdown on Big Tech platforms and internet content continues.
Furthermore, U.S.–China tensions will likely continue through 2022, impacting DAO. Also, because it could also soon dispose of its AST business amid increased regulations, its near-term prospects look.