NETEASE INC-ADR (NTES) Stock Fundamental Analysis
USA - NASDAQ:NTES - US64110W1027 - ADR
133.95 USD
+0.53 (+0.4%)
132 USD
-1.95 (-1.46%)
NTES gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 79 industry peers in the Entertainment industry. Both the health and profitability get an excellent rating, making NTES a very profitable company, without any liquidiy or solvency issues. NTES scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings would make NTES suitable for value and quality investing!
1. Profitability
1.1 Basic Checks
NTES had positive earnings in the past year.
NTES had a positive operating cash flow in the past year.
In the past 5 years NTES has always been profitable.
Each year in the past 5 years NTES had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 16.41%, NTES belongs to the top of the industry, outperforming 92.41% of the companies in the same industry.
The Return On Equity of NTES (22.87%) is better than 88.61% of its industry peers.
The Return On Invested Capital of NTES (17.40%) is better than 93.67% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NTES is above the industry average of 9.82%.
The last Return On Invested Capital (17.40%) for NTES is above the 3 year average (14.54%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.41% | ||
| ROE | 22.87% | ||
| ROIC | 17.4% |
ROA(3y)14.25%
ROA(5y)12.44%
ROE(3y)21.5%
ROE(5y)19.37%
ROIC(3y)14.54%
ROIC(5y)13.18%
1.3 Margins
NTES has a Profit Margin of 31.19%. This is amongst the best in the industry. NTES outperforms 97.47% of its industry peers.
In the last couple of years the Profit Margin of NTES has declined.
NTES has a Operating Margin of 31.43%. This is amongst the best in the industry. NTES outperforms 98.73% of its industry peers.
In the last couple of years the Operating Margin of NTES has grown nicely.
NTES has a better Gross Margin (63.17%) than 70.89% of its industry peers.
In the last couple of years the Gross Margin of NTES has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.43% | ||
| PM (TTM) | 31.19% | ||
| GM | 63.17% |
OM growth 3Y14.45%
OM growth 5Y3.83%
PM growth 3Y13.59%
PM growth 5Y-4.68%
GM growth 3Y5.24%
GM growth 5Y3.25%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so NTES is creating value.
NTES has less shares outstanding than it did 1 year ago.
NTES has less shares outstanding than it did 5 years ago.
NTES has a better debt/assets ratio than last year.
2.2 Solvency
NTES has a debt to FCF ratio of 0.25. This is a very positive value and a sign of high solvency as it would only need 0.25 years to pay back of all of its debts.
NTES's Debt to FCF ratio of 0.25 is amongst the best of the industry. NTES outperforms 88.61% of its industry peers.
A Debt/Equity ratio of 0.08 indicates that NTES is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.08, NTES is in the better half of the industry, outperforming 60.76% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.08 | ||
| Debt/FCF | 0.25 | ||
| Altman-Z | N/A |
ROIC/WACC2.57
WACC6.77%
2.3 Liquidity
A Current Ratio of 3.23 indicates that NTES has no problem at all paying its short term obligations.
The Current ratio of NTES (3.23) is better than 89.87% of its industry peers.
NTES has a Quick Ratio of 3.22. This indicates that NTES is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of NTES (3.22) is better than 89.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.23 | ||
| Quick Ratio | 3.22 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 29.10% over the past year.
NTES shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.51% yearly.
NTES shows a small growth in Revenue. In the last year, the Revenue has grown by 1.77%.
NTES shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.19% yearly.
EPS 1Y (TTM)29.1%
EPS 3Y21.03%
EPS 5Y17.51%
EPS Q2Q%26.64%
Revenue 1Y (TTM)1.77%
Revenue growth 3Y6.32%
Revenue growth 5Y12.19%
Sales Q2Q%8.14%
3.2 Future
NTES is expected to show a very negative growth in Earnings Per Share. In the coming years, the EPS will decrease by -26.15% yearly.
The Revenue is expected to grow by 9.66% on average over the next years. This is quite good.
EPS Next Y21.69%
EPS Next 2Y13.82%
EPS Next 3Y12.78%
EPS Next 5Y-26.15%
Revenue Next Year8.55%
Revenue Next 2Y8.14%
Revenue Next 3Y8.42%
Revenue Next 5Y9.66%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
NTES is valuated correctly with a Price/Earnings ratio of 15.34.
Compared to the rest of the industry, the Price/Earnings ratio of NTES indicates a rather cheap valuation: NTES is cheaper than 84.81% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of NTES to the average of the S&P500 Index (25.07), we can say NTES is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 14.18, the valuation of NTES can be described as correct.
Based on the Price/Forward Earnings ratio, NTES is valued cheaply inside the industry as 87.34% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 34.08. NTES is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.34 | ||
| Fwd PE | 14.18 |
4.2 Price Multiples
NTES's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. NTES is cheaper than 75.95% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NTES indicates a rather cheap valuation: NTES is cheaper than 87.34% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.87 | ||
| EV/EBITDA | 10.25 |
4.3 Compensation for Growth
The 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.
A more expensive valuation may be justified as NTES's earnings are expected to grow with 12.78% in the coming years.
PEG (NY)0.71
PEG (5Y)0.88
EPS Next 2Y13.82%
EPS Next 3Y12.78%
5. Dividend
5.1 Amount
NTES has a Yearly Dividend Yield of 2.17%.
Compared to an average industry Dividend Yield of 41.65, NTES pays a better dividend. On top of this NTES pays more dividend than 91.14% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, NTES has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.17% |
5.2 History
The dividend of NTES has a limited annual growth rate of 4.94%.
NTES has been paying a dividend for at least 10 years, so it has a reliable track record.
NTES has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)4.94%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
NTES pays out 36.90% of its income as dividend. This is a sustainable payout ratio.
DP36.9%
EPS Next 2Y13.82%
EPS Next 3Y12.78%
133.95
+0.53 (+0.4%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners9.59%
Inst Owner Change7.79%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap86.33B
Revenue(TTM)105.30B
Net Income(TTM)34.21B
Analysts83.89
Price Target164.55 (22.84%)
Short Float %1.66%
Short Ratio3.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.17% |
Yearly Dividend2.45
Dividend Growth(5Y)4.94%
DP36.9%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)10.07%
Min EPS beat(2)-2.68%
Max EPS beat(2)22.83%
EPS beat(4)2
Avg EPS beat(4)6.87%
Min EPS beat(4)-8.86%
Max EPS beat(4)22.83%
EPS beat(8)4
Avg EPS beat(8)4.89%
EPS beat(12)7
Avg EPS beat(12)13.23%
EPS beat(16)10
Avg EPS beat(16)14.05%
Revenue beat(2)0
Avg Revenue beat(2)-2.35%
Min Revenue beat(2)-3.91%
Max Revenue beat(2)-0.78%
Revenue beat(4)0
Avg Revenue beat(4)-3.07%
Min Revenue beat(4)-4.07%
Max Revenue beat(4)-0.78%
Revenue beat(8)0
Avg Revenue beat(8)-3.46%
Revenue beat(12)0
Avg Revenue beat(12)-3.33%
Revenue beat(16)2
Avg Revenue beat(16)-2.21%
PT rev (1m)3.38%
PT rev (3m)10.86%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.23%
EPS NY rev (1m)0.08%
EPS NY rev (3m)0.89%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)1.18%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.34 | ||
| Fwd PE | 14.18 | ||
| P/S | 5.6 | ||
| P/FCF | 13.87 | ||
| P/OCF | 13.19 | ||
| P/B | 4.11 | ||
| P/tB | 4.11 | ||
| EV/EBITDA | 10.25 |
EPS(TTM)8.73
EY6.52%
EPS(NY)9.45
Fwd EY7.05%
FCF(TTM)9.66
FCFY7.21%
OCF(TTM)10.15
OCFY7.58%
SpS23.92
BVpS32.63
TBVpS32.63
PEG (NY)0.71
PEG (5Y)0.88
Graham Number80.05
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.41% | ||
| ROE | 22.87% | ||
| ROCE | 21.81% | ||
| ROIC | 17.4% | ||
| ROICexc | 130.14% | ||
| ROICexgc | 130.14% | ||
| OM | 31.43% | ||
| PM (TTM) | 31.19% | ||
| GM | 63.17% | ||
| FCFM | 40.36% |
ROA(3y)14.25%
ROA(5y)12.44%
ROE(3y)21.5%
ROE(5y)19.37%
ROIC(3y)14.54%
ROIC(5y)13.18%
ROICexc(3y)98.11%
ROICexc(5y)81.85%
ROICexgc(3y)117.55%
ROICexgc(5y)98.29%
ROCE(3y)19.38%
ROCE(5y)17.87%
ROICexgc growth 3Y31.39%
ROICexgc growth 5Y13.28%
ROICexc growth 3Y29.84%
ROICexc growth 5Y14.27%
OM growth 3Y14.45%
OM growth 5Y3.83%
PM growth 3Y13.59%
PM growth 5Y-4.68%
GM growth 3Y5.24%
GM growth 5Y3.25%
F-Score8
Asset Turnover0.53
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.08 | ||
| Debt/FCF | 0.25 | ||
| Debt/EBITDA | 0.31 | ||
| Cap/Depr | 107.66% | ||
| Cap/Sales | 2.09% | ||
| Interest Coverage | 97.92 | ||
| Cash Conversion | 127.21% | ||
| Profit Quality | 129.41% | ||
| Current Ratio | 3.23 | ||
| Quick Ratio | 3.22 | ||
| Altman-Z | N/A |
F-Score8
WACC6.77%
ROIC/WACC2.57
Cap/Depr(3y)107.89%
Cap/Depr(5y)102.75%
Cap/Sales(3y)2.99%
Cap/Sales(5y)3.4%
Profit Quality(3y)118.33%
Profit Quality(5y)132.69%
High Growth Momentum
Growth
EPS 1Y (TTM)29.1%
EPS 3Y21.03%
EPS 5Y17.51%
EPS Q2Q%26.64%
EPS Next Y21.69%
EPS Next 2Y13.82%
EPS Next 3Y12.78%
EPS Next 5Y-26.15%
Revenue 1Y (TTM)1.77%
Revenue growth 3Y6.32%
Revenue growth 5Y12.19%
Sales Q2Q%8.14%
Revenue Next Year8.55%
Revenue Next 2Y8.14%
Revenue Next 3Y8.42%
Revenue Next 5Y9.66%
EBIT growth 1Y18.69%
EBIT growth 3Y21.69%
EBIT growth 5Y16.49%
EBIT Next Year38.3%
EBIT Next 3Y18.56%
EBIT Next 5Y16.32%
FCF growth 1Y65.97%
FCF growth 3Y19.76%
FCF growth 5Y21.96%
OCF growth 1Y54.29%
OCF growth 3Y16.76%
OCF growth 5Y18.17%
NETEASE INC-ADR / NTES FAQ
What is the ChartMill fundamental rating of NETEASE INC-ADR (NTES) stock?
ChartMill assigns a fundamental rating of 7 / 10 to NTES.
What is the valuation status for NTES stock?
ChartMill assigns a valuation rating of 8 / 10 to NETEASE INC-ADR (NTES). This can be considered as Undervalued.
What is the profitability of NTES stock?
NETEASE INC-ADR (NTES) has a profitability rating of 9 / 10.
How financially healthy is NETEASE INC-ADR?
The financial health rating of NETEASE INC-ADR (NTES) is 8 / 10.
Can you provide the expected EPS growth for NTES stock?
The Earnings per Share (EPS) of NETEASE INC-ADR (NTES) is expected to grow by 21.69% in the next year.