DAO vs EDU: Which Is the Better Buy in 2026?

Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

Reading it: EDU is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. DAO and EDU share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined DAO and EDU exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

Youdao, Inc. began life in 2006 as NetEase's dictionary and translation arm and listed American Depositary Shares on the NYSE in 2019. NetEase still holds a controlling stake of roughly two thirds, which shapes everything from governance to funding. The business now runs on three legs. Learning services (online courses, subscription study products, and AI tutoring apps such as the Hi Echo spoken-English agent, built on the in-house Ziyue language model) produced about ~$91 million of revenue in the March 2026 quarter. Online marketing services, essentially selling performance advertising across Youdao's own apps and a broader ad network, contributed about ~$89 million and is now the fastest growing piece at ~+21% year over year. Smart devices, the dictionary pens and translation hardware that once carried the growth story, shrank about ~43% to roughly ~$16 million.

Full DAO guide

New Oriental Education & Technology Group is a Beijing-based education company that trades in the US as an ADR under the ticker EDU (a Hong Kong listing, 9901, also exists). Founded in 1993 as an English and test-prep school, it became China's best-known tutoring brand before Beijing's 2021 "double reduction" policy banned for-profit academic tutoring of core K-9 subjects and wiped out most of the company's original business. Since then it has rebuilt around segments that remain permitted: overseas test preparation and study-abroad consulting, non-academic tutoring (arts, coding, STEAM, study tours), intelligent learning devices, and a fast-growing live-streaming e-commerce operation run through its East Buy (Oriental Select) platform.

Full EDU guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• DAO drivers: Advertising is quietly carrying the company; AI agents and subscription learning.
• EDU drivers: Overseas test prep and study-abroad demand; New learning businesses and smart devices.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: Profit is the fragile part of this story: trailing net income of about ~$10 million against a market value near ~$2.19 billion leaves essentially no earnings cushion, and one weak quarter can erase the margin entirely. For EDU, the dominant risk is Chinese regulation: the same government that erased the K-9 tutoring business could tighten rules on non-academic tutoring, devices, or e-commerce with little warning.

Pick DAO if you believe its drivers more; EDU if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the DAO and EDU guides.

DAO. Youdao reports in renminbi, so the dollar figures above use the company's own conversion in its filings and can move with the exchange rate. The trailing multiple looks extreme because the denominator is tiny, not because the revenue multiple is stretched: at roughly ~2.5 times trailing sales the stock is priced closer to a modest-growth internet company than to a high-multiple AI name. Second quarter 2026 results were scheduled for August 20, 2026, and the learning services growth rate is the line most tied to management's own stated target.

EDU. New Oriental returned to solid growth after the crackdown, with fiscal 2025 revenue near $4.9 billion and fiscal 2026 guided toward roughly $5.6 billion. The stock has traded well below pre-2021 levels and below some analysts' fair-value estimates, reflecting a persistent China-ADR discount rather than weak operations. A large net cash balance means enterprise value is well below market cap.

Headline figures (approximate, August 2026): DAO shows market cap ~$2.19B, revenue (ttm) ~$864M, up ~8% year over year, net income (ttm) ~$10M (EPS ~$0.08), p/e (trailing) ~216x; EDU shows revenue (fy2025) ~$4.9B, revenue (fy2026 guidance) ~$5.6B, recent quarterly revenue growth ~20% YoY, net income (fy2025) ~$372M.

DAO and EDU are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined DAO and EDU exposure against your real portfolio. It is not an investment adviser.