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

Last update: May 23, 2024

NETEASE INC-ADR (NASDAQ:NTES) has caught the attention of our stock screener as a great value stock. NASDAQ:NTES excels in profitability, solvency, and liquidity, all while being very reasonably priced. Let's delve into the details.

Assessing Valuation for NASDAQ:NTES

To assess a stock's valuation, ChartMill utilizes a Valuation Rating on a scale of 0 to 10. This comprehensive assessment considers various valuation aspects, comparing price to earnings and cash flows, while factoring in profitability and growth. NASDAQ:NTES has achieved a 7 out of 10:

Based on the Price/Earnings ratio, NTES is valued cheaply inside the industry as 85.53% of the companies are valued more expensively.
NTES's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.49.
Based on the Price/Forward Earnings ratio, NTES is valued cheaply inside the industry as 86.84% of the companies are valued more expensively.
NTES is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.06, which is the current average of the S&P500 Index.
80.26% 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 cheaper than 88.16% of the companies in the same industry.
NTES has an outstanding profitability rating, which may justify a higher PE ratio.

Profitability Examination 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 9 for profitability:

NTES's Return On Assets of 15.82% is amongst the best of the industry. NTES outperforms 97.37% of its industry peers.
The Return On Equity of NTES (23.67%) is better than 92.11% of its industry peers.
NTES's Return On Invested Capital of 15.15% is amongst the best of the industry. NTES outperforms 93.42% of its industry peers.
The last Return On Invested Capital (15.15%) for NTES is above the 3 year average (12.62%), which is a sign of increasing profitability.
NTES's Profit Margin of 28.43% is amongst the best of the industry. NTES outperforms 97.37% of its industry peers.
NTES's Profit Margin has improved in the last couple of years.
NTES has a Operating Margin of 26.78%. This is amongst the best in the industry. NTES outperforms 97.37% of its industry peers.
In the last couple of years the Operating Margin of NTES has grown nicely.
With a decent Gross Margin value of 60.95%, NTES is doing good in the industry, outperforming 76.32% of the companies in the same industry.
NTES's Gross Margin has improved in the last couple of years.

Health Analysis for NASDAQ:NTES

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NASDAQ:NTES has achieved a 8 out of 10:

An Altman-Z score of 6.95 indicates that NTES is not in any danger for bankruptcy at the moment.
NTES has a Altman-Z score of 6.95. This is amongst the best in the industry. NTES outperforms 94.74% of its industry peers.
The Debt to FCF ratio of NTES is 0.63, which is an excellent value as it means it would take NTES, only 0.63 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.63, NTES belongs to the best of the industry, outperforming 94.74% of the companies in the same industry.
NTES has a Debt/Equity ratio of 0.16. This is a healthy value indicating a solid balance between debt and equity.
A Current Ratio of 2.65 indicates that NTES has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.65, NTES is in the better half of the industry, outperforming 78.95% of the companies in the same industry.
NTES has a Quick Ratio of 2.64. This indicates that NTES is financially healthy and has no problem in meeting its short term obligations.
NTES's Quick ratio of 2.64 is fine compared to the rest of the industry. NTES outperforms 78.95% of its industry peers.

Understanding NASDAQ:NTES's Growth Score

ChartMill assigns a Growth Rating to each stock, ranging from 0 to 10. This rating is determined by analyzing different growth elements, including EPS and revenue growth, spanning both historical and future figures. In the case of NASDAQ:NTES, the assigned 6 reflects its growth potential:

NTES shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 44.94%, which is quite impressive.
The Earnings Per Share has been growing by 39.56% on average over the past years. This is a very strong growth
NTES shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.12% yearly.
The Earnings Per Share is expected to grow by 8.32% on average over the next years. This is quite good.
The Revenue is expected to grow by 9.66% on average over the next years. This is quite good.

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

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

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.