NETEASE INC-ADR (NTES)
US64110W1027 - ADR
Overall NTES gets a fundamental rating of 7 out of 10. We evaluated NTES against 72 industry peers in the Entertainment industry. NTES has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. NTES is valued quite cheap, while showing a decent growth score. This is a good 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.
Each year in the past 5 years NTES has been profitable.
In the past 5 years NTES always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 14.88%, NTES belongs to the top of the industry, outperforming 92.96% of the companies in the same industry.
NTES has a better Return On Equity (20.82%) than 90.14% of its industry peers.
With an excellent Return On Invested Capital value of 15.81%, NTES belongs to the best of the industry, outperforming 94.37% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for NTES is significantly below the industry average of 88.51%.
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
NTES's Profit Margin of 26.03% 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.
Looking at the Operating Margin, with a value of 27.09%, NTES belongs to the top of the industry, outperforming 97.18% of the companies in the same industry.
In the last couple of years the Operating Margin of NTES has grown nicely.
With a decent Gross Margin value of 62.79%, NTES is doing good in the industry, outperforming 73.24% 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
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.
Compared to 5 years ago, NTES has more shares outstanding
NTES has a better debt/assets ratio than last year.
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.
The Debt to FCF ratio of NTES (0.31) is better than 91.55% of its industry peers.
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 70.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.08 | ||
| Debt/FCF | 0.31 | ||
| Altman-Z | N/A |
ROIC/WACC2.17
WACC7.28%
2.3 Liquidity
A Current Ratio of 3.08 indicates that NTES has no problem at all paying its short term obligations.
NTES has a better Current ratio (3.08) than 81.69% 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 81.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.08 | ||
| Quick Ratio | 3.06 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.15% over the past year.
Measured over the past years, NTES shows a very strong growth in Earnings Per Share. The EPS has been growing by 39.56% on average per year.
NTES shows a small growth in Revenue. In the last year, the Revenue has grown by 3.94%.
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.
EPS 1Y (TTM)5.15%
EPS 3Y31.41%
EPS 5Y39.56%
EPS Q2Q%-9.57%
Revenue 1Y (TTM)3.94%
Revenue growth 3Y11.99%
Revenue growth 5Y15.12%
Sales Q2Q%-0.77%
3.2 Future
NTES is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.37% yearly.
The Revenue is expected to grow by 9.53% on average over the next years. This is quite good.
EPS Next Y0.64%
EPS Next 2Y4.8%
EPS Next 3Y6.37%
EPS Next 5YN/A
Revenue Next Year2.11%
Revenue Next 2Y5.18%
Revenue Next 3Y6.15%
Revenue Next 5Y9.53%
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 13.17, which indicates a correct valuation of NTES.
85.92% of the companies in the same industry are more expensive than NTES, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 28.65, NTES is valued rather cheaply.
With a Price/Forward Earnings ratio of 11.61, the valuation of NTES can be described as very reasonable.
NTES's Price/Forward Earnings ratio is rather cheap when compared to the industry. NTES is cheaper than 88.73% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of NTES to the average of the S&P500 Index (23.50), we can say NTES is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.17 | ||
| Fwd PE | 11.61 |
4.2 Price Multiples
80.28% of the companies in the same industry are more expensive than NTES, based on the Enterprise Value to EBITDA ratio.
NTES's Price/Free Cash Flow ratio is rather cheap when compared to the industry. NTES is cheaper than 91.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.42 | ||
| EV/EBITDA | 5.96 |
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)20.46
PEG (5Y)0.33
EPS Next 2Y4.8%
EPS Next 3Y6.37%
5. Dividend
5.1 Amount
NTES has a Yearly Dividend Yield of 2.85%.
NTES's Dividend Yield is rather good when compared to the industry average which is at 3.61. NTES pays more dividend than 92.96% of the companies in the same industry.
NTES's Dividend Yield is a higher than the S&P500 average which is at 2.22.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.85% |
5.2 History
On average, the dividend of NTES grows each year by 41.17%, which is quite nice.
NTES has paid a dividend for at least 10 years, which is a reliable track record.
NTES has decreased its dividend in the last 3 years.
Dividend Growth(5Y)41.17%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
NTES pays out 41.59% of its income as dividend. This is a bit on the high side, but may be sustainable.
NTES's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP41.59%
EPS Next 2Y4.8%
EPS Next 3Y6.37%
NETEASE INC-ADR
NASDAQ:NTES (11/18/2024, 8:00:01 PM)
Premarket: 86.44 -1.82 (-2.06%)88.26
+2.77 (+3.24%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap56.88B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.85% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.17 | ||
| Fwd PE | 11.61 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)20.46
PEG (5Y)0.33
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.88% | ||
| ROE | 20.82% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 27.09% | ||
| PM (TTM) | 26.03% | ||
| GM | 62.79% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.08 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.08 | ||
| Quick Ratio | 3.06 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)5.15%
EPS 3Y31.41%
EPS 5Y
EPS Q2Q%
EPS Next Y0.64%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)3.94%
Revenue growth 3Y11.99%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y