NETEASE INC-ADR (NTES) Stock Fundamental Analysis
USA - NASDAQ:NTES - US64110W1027 - ADR
140.13 USD
-1.67 (-1.18%)
140.13 USD
0 (0%)
NTES gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 79 industry peers in the Entertainment industry. NTES scores excellent points on both the profitability and health parts. This is a solid base for a good stock. NTES scores decently on growth, while it is valued quite cheap. This could make an interesting combination. This makes NTES very considerable for value and quality investing!
1. Profitability
1.1 Basic Checks
NTES had positive earnings in the past year.
In the past year NTES had a positive cash flow from operations.
In the past 5 years NTES has always been profitable.
In the past 5 years NTES always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of NTES (16.41%) is better than 92.41% of its industry peers.
With an excellent Return On Equity value of 22.87%, NTES belongs to the best of the industry, outperforming 87.34% of the companies in the same industry.
NTES's Return On Invested Capital of 17.40% is amongst the best of the industry. NTES outperforms 94.94% of its industry peers.
NTES had an Average Return On Invested Capital over the past 3 years of 14.54%. This is significantly above the industry average of 9.12%.
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's Profit Margin of 31.19% is amongst the best of the industry. NTES outperforms 97.47% of its industry peers.
In the last couple of years the Profit Margin of NTES has declined.
Looking at the Operating Margin, with a value of 31.43%, NTES belongs to the top of the industry, outperforming 98.73% of the companies in the same industry.
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.
NTES's Gross Margin has improved in the last couple of years.
| 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
NTES has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, NTES has less shares outstanding
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.
Looking at the Debt to FCF ratio, with a value of 0.25, NTES belongs to the top of the industry, outperforming 88.61% of the companies in the same industry.
A Debt/Equity ratio of 0.08 indicates that NTES is not too dependend on debt financing.
NTES has a Debt to Equity ratio of 0.08. This is in the better half of the industry: NTES outperforms 62.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.08 | ||
| Debt/FCF | 0.25 | ||
| Altman-Z | N/A |
ROIC/WACC2.56
WACC6.8%
2.3 Liquidity
A Current Ratio of 3.23 indicates that NTES has no problem at all paying its short term obligations.
With an excellent Current ratio value of 3.23, NTES belongs to the best of the industry, outperforming 89.87% of the companies in the same industry.
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 nice 18.55% over the past year.
The Earnings Per Share has been growing by 17.51% on average over the past years. This is quite good.
Looking at the last year, NTES shows a small growth in Revenue. The Revenue has grown by 2.74% in the last year.
The Revenue has been growing by 12.19% on average over the past years. This is quite good.
EPS 1Y (TTM)18.55%
EPS 3Y21.03%
EPS 5Y17.51%
EPS Q2Q%22.9%
Revenue 1Y (TTM)2.74%
Revenue growth 3Y6.32%
Revenue growth 5Y12.19%
Sales Q2Q%9.44%
3.2 Future
The Earnings Per Share is expected to decrease by -26.15% on average over the next years. This is quite bad
Based on estimates for the next years, NTES will show a quite strong growth in Revenue. The Revenue will grow by 9.66% on average per year.
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
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 16.84, which indicates a correct valuation of NTES.
Based on the Price/Earnings ratio, NTES is valued cheaply inside the industry as 84.81% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 25.89, NTES is valued a bit cheaper.
A Price/Forward Earnings ratio of 14.80 indicates a correct valuation of NTES.
88.61% of the companies in the same industry are more expensive than NTES, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 34.59. NTES is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.84 | ||
| Fwd PE | 14.8 |
4.2 Price Multiples
NTES's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. NTES is cheaper than 79.75% 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 88.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.48 | ||
| EV/EBITDA | 11.19 |
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)0.78
PEG (5Y)0.96
EPS Next 2Y13.82%
EPS Next 3Y12.78%
5. Dividend
5.1 Amount
NTES has a Yearly Dividend Yield of 2.04%. Purely for dividend investing, there may be better candidates out there.
NTES's Dividend Yield is rather good when compared to the industry average which is at 38.22. NTES pays more dividend than 89.87% of the companies in the same industry.
NTES's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.04% |
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%
140.13
-1.67 (-1.18%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners9.59%
Inst Owner Change-0.5%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap90.31B
Revenue(TTM)109.68B
Net Income(TTM)34.21B
Analysts83.89
Price Target164.19 (17.17%)
Short Float %1.58%
Short Ratio2.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.04% |
Yearly Dividend2.46
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)-0.25%
EPS NQ rev (3m)-0.14%
EPS NY rev (1m)0.08%
EPS NY rev (3m)0.89%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)1.07%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.84 | ||
| Fwd PE | 14.8 | ||
| P/S | 5.84 | ||
| P/FCF | 14.48 | ||
| P/OCF | 13.77 | ||
| P/B | 4.28 | ||
| P/tB | 4.28 | ||
| EV/EBITDA | 11.19 |
EPS(TTM)8.32
EY5.94%
EPS(NY)9.47
Fwd EY6.76%
FCF(TTM)9.68
FCFY6.91%
OCF(TTM)10.18
OCFY7.26%
SpS23.98
BVpS32.71
TBVpS32.71
PEG (NY)0.78
PEG (5Y)0.96
Graham Number78.25
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
WACC6.8%
ROIC/WACC2.56
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)18.55%
EPS 3Y21.03%
EPS 5Y17.51%
EPS Q2Q%22.9%
EPS Next Y21.69%
EPS Next 2Y13.82%
EPS Next 3Y12.78%
EPS Next 5Y-26.15%
Revenue 1Y (TTM)2.74%
Revenue growth 3Y6.32%
Revenue growth 5Y12.19%
Sales Q2Q%9.44%
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.