Despite its impressive fundamentals, NASDAQ:NTES remains undervalued.

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.

Assessing Valuation Metrics 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:

• Compared to the rest of the industry, the Price/Earnings ratio of NTES indicates a rather cheap valuation: NTES is cheaper than 86.36% of the companies listed in the same industry.
• NTES is valuated rather cheaply when we compare the Price/Earnings ratio to 28.58, which is the current average of the S&P500 Index.
• NTES's Price/Forward Earnings ratio is rather cheap when compared to the industry. NTES is cheaper than 89.39% of the companies in the same industry.
• Compared to an average S&P500 Price/Forward Earnings ratio of 95.03, NTES is valued rather cheaply.
• NTES's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. NTES is cheaper than 83.33% of the companies in the same industry.
• NTES's Price/Free Cash Flow ratio is rather cheap when compared to the industry. NTES is cheaper than 83.33% of the companies in the same industry.
• NTES has an outstanding profitability rating, which may justify a higher PE ratio.

How do we evaluate the Profitability for NASDAQ:NTES?

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NASDAQ:NTES, the assigned 9 is noteworthy for profitability:

• NTES has a better Return On Assets (14.88%) than 93.94% of its industry peers.
• NTES's Return On Equity of 20.82% is amongst the best of the industry. NTES outperforms 89.39% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 15.81%, NTES belongs to the top of the industry, outperforming 95.45% of the companies in the same industry.
• The 3 year average ROIC (12.62%) for NTES is below the current ROIC(15.81%), indicating increased profibility in the last year.
• NTES's Profit Margin of 26.03% is amongst the best of the industry. NTES outperforms 95.45% of its industry peers.
• NTES's Profit Margin has improved in the last couple of years.
• The Operating Margin of NTES (27.09%) is better than 98.48% of its industry peers.
• In the last couple of years the Operating Margin of NTES has grown nicely.
• NTES has a better Gross Margin (62.79%) than 72.73% of its industry peers.
• In the last couple of years the Gross Margin of NTES has grown nicely.

Assessing Health for NASDAQ:NTES

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:

• The Debt to FCF ratio of NTES is 0.31, which is an excellent value as it means it would take NTES, only 0.31 years of fcf income to pay off all of its debts.
• With an excellent Debt to FCF ratio value of 0.31, NTES belongs to the best of the industry, outperforming 89.39% of the companies in the same industry.
• NTES has a Debt/Equity ratio of 0.08. This is a healthy value indicating a solid balance between debt and equity.
• NTES's Debt to Equity ratio of 0.08 is fine compared to the rest of the industry. NTES outperforms 71.21% of its industry peers.
• NTES has a Current Ratio of 3.08. This indicates that NTES is financially healthy and has no problem in meeting its short term obligations.
• The Current ratio of NTES (3.08) is better than 83.33% of its industry peers.
• NTES has a Quick Ratio of 3.06. This indicates that NTES is financially healthy and has no problem in meeting its short term obligations.
• NTES has a Quick ratio of 3.06. This is amongst the best in the industry. NTES outperforms 83.33% of its industry peers.

Understanding NASDAQ:NTES's 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 been growing by 39.56% on average over the past years. This is a very strong growth
• Measured over the past years, NTES shows a quite strong growth in Revenue. The Revenue has been growing by 15.12% on average per year.
• Based on estimates for the next years, NTES will show a quite strong growth in Revenue. The Revenue will grow by 8.14% on average per year.

More Decent Value stocks can be found in our Decent Value screener.

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

Keep in mind

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.