NASDAQ:NTES qualifies as a high growth stock and is consolidating.

In this article we will dive into NETEASE INC-ADR (NASDAQ:NTES) as a possible candidate for growth investing. Investors should always do their own research, but we noticed NETEASE INC-ADR showing up in our strong growth, ready to breakout screen, which makes it worth to investigate a bit more.

Looking at the Growth

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NASDAQ:NTES has received a 8 out of 10:

• NTES shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 24.56%, which is quite impressive.
• 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.
• The Revenue has been growing by 16.78% on average over the past years. This is quite good.
• NTES is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.51% yearly.
• NTES is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 65.01% yearly.
• The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

Exploring NASDAQ:NTES's Health

ChartMill utilizes a Health Rating to assess stocks, scoring them on a scale of 0 to 10. This rating takes into account a variety of liquidity and solvency ratios, both in absolute terms and in comparison to industry peers. NASDAQ:NTES has earned a 7 out of 10:

• NTES has a debt to FCF ratio of 0.41. This is a very positive value and a sign of high solvency as it would only need 0.41 years to pay back of all of its debts.
• Looking at the Debt to FCF ratio, with a value of 0.41, NTES belongs to the top of the industry, outperforming 94.44% 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.
• NTES has a better Debt to Equity ratio (0.10) than 75.00% of its industry peers.
• A Current Ratio of 2.91 indicates that NTES has no problem at all paying its short term obligations.
• NTES has a better Current ratio (2.91) than 84.72% of its industry peers.
• NTES has a Quick Ratio of 2.89. This indicates that NTES is financially healthy and has no problem in meeting its short term obligations.
• The Quick ratio of NTES (2.89) is better than 84.72% of its industry peers.

Profitability Analysis for NASDAQ:NTES

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NASDAQ:NTES has achieved a 8:

• With an excellent Return On Assets value of 15.61%, NTES belongs to the best of the industry, outperforming 98.61% of the companies in the same industry.
• Looking at the Return On Equity, with a value of 22.33%, NTES belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
• Looking at the Return On Invested Capital, with a value of 14.53%, NTES belongs to the top of the industry, outperforming 95.83% of the companies in the same industry.
• The last Return On Invested Capital (14.53%) for NTES is above the 3 year average (10.68%), which is a sign of increasing profitability.
• NTES's Profit Margin of 26.35% is amongst the best of the industry. NTES outperforms 98.61% of its industry peers.
• The Operating Margin of NTES (24.86%) is better than 97.22% of its industry peers.
• NTES has a better Gross Margin (58.50%) than 75.00% of its industry peers.

Why is NASDAQ:NTES a setup?

Besides the Technical Rating, ChartMill assigns a Setup Rating to every stock to determine the degree of consolidation. This rating, ranging from 0 to 10, is updated daily and evaluates various short-term technical indicators. NASDAQ:NTES currently holds a 7 as its setup rating, suggesting a particular level of consolidation in the stock.

Although the technical rating is only medium, NTES does present a nice setup opportunity. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 101.12. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 99.89, a Stop Loss order could be placed below this zone.

Our Strong Growth screener lists more Strong Growth stocks and is updated daily.

Check the latest full fundamental report of NTES for a complete fundamental analysis.

Our latest full technical report of NTES contains the most current technical analsysis.

Keep in mind

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.