NASDAQ:NTES is an undervalued gem with solid fundamentals.

Last update: Aug 23, 2024

Discover NETEASE INC-ADR (NASDAQ:NTES), an undervalued stock highlighted by our stock screener. NASDAQ:NTES showcases solid financial health and profitability while maintaining an appealing valuation. We'll explore the details.

Valuation Analysis for NASDAQ:NTES

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NASDAQ:NTES has received a 8 out of 10:

Based on the Price/Earnings ratio of 11.83, the valuation of NTES can be described as reasonable.
NTES's Price/Earnings ratio is rather cheap when compared to the industry. NTES is cheaper than 90.14% of the companies in the same industry.
When comparing the Price/Earnings ratio of NTES to the average of the S&P500 Index (29.64), we can say NTES is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 10.16, the valuation of NTES can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NTES indicates a rather cheap valuation: NTES is cheaper than 90.14% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of NTES to the average of the S&P500 Index (21.00), we can say NTES is valued rather cheaply.
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NTES indicates a rather cheap valuation: NTES is cheaper than 81.69% of the companies listed in the same industry.
NTES's Price/Free Cash Flow ratio is rather cheap when compared to the industry. NTES is cheaper than 90.14% of the companies in the same industry.
The excellent profitability rating of NTES may justify a higher PE ratio.

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 9 for profitability:

The Return On Assets of NTES (15.53%) is better than 97.18% of its industry peers.
With an excellent Return On Equity value of 23.80%, NTES belongs to the best of the industry, outperforming 92.96% of the companies in the same industry.
NTES has a better Return On Invested Capital (14.55%) than 94.37% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NTES is above the industry average of 9.30%.
The 3 year average ROIC (12.62%) for NTES is below the current ROIC(14.55%), indicating increased profibility in the last year.
NTES's Profit Margin of 28.78% is amongst the best of the industry. NTES outperforms 97.18% of its industry peers.
In the last couple of years the Profit Margin of NTES has grown nicely.
The Operating Margin of NTES (26.70%) is better than 97.18% of its industry peers.
NTES's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 61.92%, NTES is doing good in the industry, outperforming 73.24% of the companies in the same industry.
In the last couple of years the Gross Margin of NTES has grown nicely.

Health Examination for NASDAQ:NTES

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. NASDAQ:NTES has earned a 7 out of 10:

The Debt to FCF ratio of NTES is 0.71, which is an excellent value as it means it would take NTES, only 0.71 years of fcf income to pay off all of its debts.
NTES has a better Debt to FCF ratio (0.71) than 91.55% of its industry peers.
NTES has a Debt/Equity ratio of 0.20. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.20, NTES is doing good in the industry, outperforming 61.97% of the companies in the same industry.
NTES has a Current Ratio of 2.53. This indicates that NTES is financially healthy and has no problem in meeting its short term obligations.
With a decent Current ratio value of 2.53, NTES is doing good in the industry, outperforming 77.46% of the companies in the same industry.
NTES has a Quick Ratio of 2.52. This indicates that NTES is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.52, NTES is in the better half of the industry, outperforming 77.46% of the companies in the same industry.

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 5 out of 10:

The Earnings Per Share has grown by an nice 12.21% over the past year.
The Earnings Per Share has been growing by 39.56% on average over the past years. This is a very strong growth
The Revenue has been growing by 15.12% on average over the past years. This is quite good.
Based on estimates for the next years, NTES will show a quite strong growth in Revenue. The Revenue will grow by 9.53% on average per year.

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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.