NASDAQ:NTES: good value for what you're paying.

Last update: Dec 4, 2023

Our stock screening tool has pinpointed NETEASE INC-ADR (NASDAQ:NTES) as an undervalued stock. NASDAQ:NTES maintains a solid financial footing. Furthermore, it remains attractively priced. Let's delve into the specifics below.

Evaluating Valuation: NASDAQ:NTES

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NASDAQ:NTES boasts a 8 out of 10:

NTES's Price/Earnings ratio is rather cheap when compared to the industry. NTES is cheaper than 84.21% of the companies in the same industry.
NTES's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.04.
81.58% of the companies in the same industry are more expensive than NTES, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 20.08. NTES is valued slightly cheaper when compared to this.
73.68% of the companies in the same industry are more expensive than NTES, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, NTES is valued cheaply inside the industry as 84.21% of the companies are valued more expensively.
NTES's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of NTES may justify a higher PE ratio.
NTES's earnings are expected to grow with 16.14% in the coming years. This may justify a more expensive valuation.

Profitability Analysis for NASDAQ:NTES

ChartMill assigns a proprietary Profitability Rating to each stock. The score is computed by evaluating various profitability ratios and margins and ranges from 0 to 10. NASDAQ:NTES was assigned a score of 8 for profitability:

With an excellent Return On Assets value of 15.61%, NTES belongs to the best of the industry, outperforming 98.68% of the companies in the same industry.
With an excellent Return On Equity value of 22.33%, NTES belongs to the best of the industry, outperforming 92.11% of the companies in the same industry.
NTES has a better Return On Invested Capital (14.53%) than 94.74% of its industry peers.
NTES had an Average Return On Invested Capital over the past 3 years of 10.68%. This is above the industry average of 8.64%.
The 3 year average ROIC (10.68%) for NTES is below the current ROIC(14.53%), indicating increased profibility in the last year.
With an excellent Profit Margin value of 26.35%, NTES belongs to the best of the industry, outperforming 98.68% of the companies in the same industry.
NTES's Operating Margin of 24.86% is amongst the best of the industry. NTES outperforms 98.68% of its industry peers.
NTES has a Gross Margin of 58.50%. This is in the better half of the industry: NTES outperforms 76.32% of its industry peers.

ChartMill's Evaluation of Health

ChartMill employs a unique Health Rating system for all stocks. This rating, ranging from 0 to 10, is determined by analyzing various liquidity and solvency ratios. For NASDAQ:NTES, the assigned 7 for health provides valuable insights:

The Debt to FCF ratio of NTES is 0.41, which is an excellent value as it means it would take NTES, only 0.41 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.41, NTES belongs to the best of the industry, outperforming 96.05% of the companies in the same industry.
NTES has a Debt/Equity ratio of 0.10. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.10, NTES is in the better half of the industry, outperforming 72.37% of the companies in the same industry.
NTES has a Current Ratio of 2.91. This indicates that NTES is financially healthy and has no problem in meeting its short term obligations.
NTES's Current ratio of 2.91 is amongst the best of the industry. NTES outperforms 81.58% of its industry peers.
A Quick Ratio of 2.89 indicates that NTES has no problem at all paying its short term obligations.
NTES's Quick ratio of 2.89 is amongst the best of the industry. NTES outperforms 81.58% of its industry peers.

Exploring NASDAQ:NTES's Growth

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. NASDAQ:NTES boasts a 6 out of 10:

The Earnings Per Share has grown by an impressive 24.56% over the past year.
Measured over the past years, NTES shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.47% on average per year.
Measured over the past years, NTES shows a quite strong growth in Revenue. The Revenue has been growing by 16.78% on average per year.
Based on estimates for the next years, NTES will show a quite strong growth in Earnings Per Share. The EPS will grow by 14.54% on average per year.
The Revenue is expected to grow by 9.69% on average over the next years. This is quite good.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

For an up to date full fundamental analysis you can check the fundamental report of NTES

Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.