NETEASE INC-ADR (NTES) Stock Fundamental Analysis
NASDAQ:NTES - Nasdaq - US64110W1027 - ADR
Taking everything into account, NTES scores 7 out of 10 in our fundamental rating. NTES was compared to 71 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 has a correct valuation and a medium growth rate. With these ratings, NTES could be worth investigating further for 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.
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 14.88%, NTES belongs to the top of the industry, outperforming 93.94% of the companies in the same industry.
NTES has a Return On Equity of 20.82%. This is amongst the best in the industry. NTES outperforms 89.39% of its industry peers.
NTES has a better Return On Invested Capital (15.81%) than 95.45% of its industry peers.
NTES had an Average Return On Invested Capital over the past 3 years of 12.62%. This is significantly below the industry average of 94.12%.
The 3 year average ROIC (12.62%) for NTES is below the current ROIC(15.81%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.88% | ||
| ROE | 20.82% | ||
| ROIC | 15.81% |
ROA(3y)12.86%
ROA(5y)13.2%
ROE(3y)20.26%
ROE(5y)22%
ROIC(3y)12.62%
ROIC(5y)12.18%
1.3 Margins
The Profit Margin of NTES (26.03%) is better than 95.45% of its industry peers.
NTES's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 27.09%, NTES belongs to the top of the industry, outperforming 98.48% of the companies in the same industry.
NTES's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 62.79%, NTES is in the better half of the industry, outperforming 74.24% of the companies in the same industry.
NTES's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 27.09% | ||
| PM (TTM) | 26.03% | ||
| GM | 62.79% |
OM growth 3Y10.71%
OM growth 5Y6.56%
PM growth 3Y20.19%
PM growth 5Y18.79%
GM growth 3Y4.82%
GM growth 5Y2.67%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NTES is creating value.
Compared to 1 year ago, NTES has less shares outstanding
The number of shares outstanding for NTES has been increased compared to 5 years ago.
Compared to 1 year ago, NTES has an improved debt to assets ratio.
2.2 Solvency
NTES has a debt to FCF ratio of 0.31. This is a very positive value and a sign of high solvency as it would only need 0.31 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 0.31, NTES belongs to the top 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.
With a decent Debt to Equity ratio value of 0.08, NTES is doing good in the industry, outperforming 71.21% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.08 | ||
| Debt/FCF | 0.31 | ||
| Altman-Z | N/A |
ROIC/WACC2.16
WACC7.31%
2.3 Liquidity
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.
NTES has a Current ratio of 3.08. This is amongst the best in the industry. NTES outperforms 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.
Looking at the Quick ratio, with a value of 3.06, NTES belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.08 | ||
| Quick Ratio | 3.06 |
3. Growth
3.1 Past
NTES shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.29%.
NTES shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 39.56% yearly.
Looking at the last year, NTES shows a small growth in Revenue. The Revenue has grown by 3.94% in the last year.
NTES shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 15.12% yearly.
EPS 1Y (TTM)4.29%
EPS 3Y31.41%
EPS 5Y39.56%
EPS Q2Q%-12.56%
Revenue 1Y (TTM)3.94%
Revenue growth 3Y11.99%
Revenue growth 5Y15.12%
Sales Q2Q%-3.89%
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 -29.03% yearly.
NTES is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.32% yearly.
EPS Next Y0.01%
EPS Next 2Y4.94%
EPS Next 3Y6.35%
EPS Next 5Y-29.03%
Revenue Next Year1.4%
Revenue Next 2Y4.54%
Revenue Next 3Y5.7%
Revenue Next 5Y8.32%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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
With a Price/Earnings ratio of 15.16, NTES is valued correctly.
NTES's Price/Earnings ratio is rather cheap when compared to the industry. NTES is cheaper than 86.36% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.94, NTES is valued a bit cheaper.
A Price/Forward Earnings ratio of 13.21 indicates a correct valuation of NTES.
Based on the Price/Forward Earnings ratio, NTES is valued cheaply inside the industry as 89.39% of the companies are valued more expensively.
NTES is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.11, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.16 | ||
| Fwd PE | 13.21 |
4.2 Price Multiples
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.
Based on the Price/Free Cash Flow ratio, NTES is valued cheaper than 86.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.03 | ||
| EV/EBITDA | 7.83 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NTES does not grow enough to justify the current Price/Earnings ratio.
NTES has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)1866.66
PEG (5Y)0.38
EPS Next 2Y4.94%
EPS Next 3Y6.35%
5. Dividend
5.1 Amount
NTES has a Yearly Dividend Yield of 2.45%.
NTES's Dividend Yield is rather good when compared to the industry average which is at 3.21. NTES pays more dividend than 93.94% of the companies in the same industry.
NTES's Dividend Yield is comparable with the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
5.2 History
The dividend of NTES is nicely growing with an annual growth rate of 41.17%!
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)41.17%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
41.59% of the earnings are spent on dividend by NTES. This is a bit on the high side, but may be sustainable.
DP41.59%
EPS Next 2Y4.94%
EPS Next 3Y6.35%
NETEASE INC-ADR
NASDAQ:NTES (1/17/2025, 8:18:09 PM)
Premarket: 100.48 +0.72 (+0.72%)99.76
+0.45 (+0.45%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners11.8%
Inst Owner Change-1.41%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap64.29B
Analysts84.62
Price Target115.34 (15.62%)
Short Float %3.3%
Short Ratio3.12
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
Yearly Dividend2.49
Dividend Growth(5Y)41.17%
DP41.59%
Div Incr Years3
Div Non Decr Years3
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-5.64%
Min EPS beat(2)-8.86%
Max EPS beat(2)-2.42%
EPS beat(4)1
Avg EPS beat(4)-4.95%
Min EPS beat(4)-9.75%
Max EPS beat(4)1.23%
EPS beat(8)4
Avg EPS beat(8)9.04%
EPS beat(12)8
Avg EPS beat(12)16.17%
EPS beat(16)10
Avg EPS beat(16)11.81%
Revenue beat(2)0
Avg Revenue beat(2)-3.87%
Min Revenue beat(2)-4.07%
Max Revenue beat(2)-3.67%
Revenue beat(4)0
Avg Revenue beat(4)-3.97%
Min Revenue beat(4)-6.06%
Max Revenue beat(4)-2.09%
Revenue beat(8)0
Avg Revenue beat(8)-3.62%
Revenue beat(12)1
Avg Revenue beat(12)-2.46%
Revenue beat(16)2
Avg Revenue beat(16)-1.96%
PT rev (1m)0.09%
PT rev (3m)-1.73%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-7.38%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.92%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-9.25%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.16 | ||
| Fwd PE | 13.21 | ||
| P/S | 4.45 | ||
| P/FCF | 13.03 | ||
| P/OCF | 12.22 | ||
| P/B | 3.56 | ||
| P/tB | 3.56 | ||
| EV/EBITDA | 7.83 |
EPS(TTM)6.58
EY6.6%
EPS(NY)7.55
Fwd EY7.57%
FCF(TTM)7.66
FCFY7.68%
OCF(TTM)8.16
OCFY8.18%
SpS22.43
BVpS28.04
TBVpS28.04
PEG (NY)1866.66
PEG (5Y)0.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.88% | ||
| ROE | 20.82% | ||
| ROCE | 20.57% | ||
| ROIC | 15.81% | ||
| ROICexc | 91.83% | ||
| ROICexgc | 91.83% | ||
| OM | 27.09% | ||
| PM (TTM) | 26.03% | ||
| GM | 62.79% | ||
| FCFM | 34.15% |
ROA(3y)12.86%
ROA(5y)13.2%
ROE(3y)20.26%
ROE(5y)22%
ROIC(3y)12.62%
ROIC(5y)12.18%
ROICexc(3y)73.41%
ROICexc(5y)67.64%
ROICexgc(3y)87.4%
ROICexgc(5y)82.01%
ROCE(3y)17.94%
ROCE(5y)17.56%
ROICexcg growth 3Y15.18%
ROICexcg growth 5Y16.26%
ROICexc growth 3Y17.92%
ROICexc growth 5Y12.49%
OM growth 3Y10.71%
OM growth 5Y6.56%
PM growth 3Y20.19%
PM growth 5Y18.79%
GM growth 3Y4.82%
GM growth 5Y2.67%
F-Score7
Asset Turnover0.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.08 | ||
| Debt/FCF | 0.31 | ||
| Debt/EBITDA | 0.36 | ||
| Cap/Depr | 100.02% | ||
| Cap/Sales | 2.25% | ||
| Interest Coverage | 53.3 | ||
| Cash Conversion | 124.06% | ||
| Profit Quality | 131.18% | ||
| Current Ratio | 3.08 | ||
| Quick Ratio | 3.06 | ||
| Altman-Z | N/A |
F-Score7
WACC7.31%
ROIC/WACC2.16
Cap/Depr(3y)109.12%
Cap/Depr(5y)109.97%
Cap/Sales(3y)3.47%
Cap/Sales(5y)4.1%
Profit Quality(3y)119.41%
Profit Quality(5y)120.54%
High Growth Momentum
Growth
EPS 1Y (TTM)4.29%
EPS 3Y31.41%
EPS 5Y39.56%
EPS Q2Q%-12.56%
EPS Next Y0.01%
EPS Next 2Y4.94%
EPS Next 3Y6.35%
EPS Next 5Y-29.03%
Revenue 1Y (TTM)3.94%
Revenue growth 3Y11.99%
Revenue growth 5Y15.12%
Sales Q2Q%-3.89%
Revenue Next Year1.4%
Revenue Next 2Y4.54%
Revenue Next 3Y5.7%
Revenue Next 5Y8.32%
EBIT growth 1Y13.28%
EBIT growth 3Y23.98%
EBIT growth 5Y22.67%
EBIT Next Year10.52%
EBIT Next 3Y10.78%
EBIT Next 5Y13.24%
FCF growth 1Y49.16%
FCF growth 3Y12.87%
FCF growth 5Y36.6%
OCF growth 1Y42.13%
OCF growth 3Y12.39%
OCF growth 5Y21.37%