NETEASE INC-ADR (NTES)
US64110W1027 - ADR
Taking everything into account, NTES scores 7 out of 10 in our fundamental rating. NTES was compared to 72 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.
NTES had a positive operating cash flow in the past year.
NTES had positive earnings in each of the past 5 years.
In the past 5 years NTES always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 14.88%, NTES belongs to the best of the industry, outperforming 92.96% of the companies in the same industry.
With an excellent Return On Equity value of 20.82%, NTES belongs to the best of the industry, outperforming 88.73% of the companies in the same industry.
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 86.07%.
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
With an excellent Profit Margin value of 26.03%, NTES belongs to the best of the industry, outperforming 95.77% of the companies in the same industry.
NTES's Profit Margin has improved in the last couple of years.
NTES's Operating Margin of 27.09% is amongst the best of the industry. NTES outperforms 97.18% of its industry peers.
NTES's Operating Margin has improved in the last couple of years.
NTES has a better Gross Margin (62.79%) than 74.65% of its industry peers.
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
NTES has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
NTES has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, NTES has more shares outstanding
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.
NTES's Debt to FCF ratio of 0.31 is amongst the best of the industry. NTES outperforms 90.14% of its industry peers.
A Debt/Equity ratio of 0.08 indicates that NTES is not too dependend on debt financing.
The Debt to Equity ratio of NTES (0.08) is better than 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
WACC7.29%
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.
Looking at the Current ratio, with a value of 3.08, NTES belongs to the top of the industry, outperforming 81.69% of the companies in the same industry.
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.
The Quick ratio of NTES (3.06) is better than 81.69% of its industry peers.
| 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%.
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.
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
Based on estimates for the next years, NTES will show a very negative growth in Earnings Per Share. The EPS will decrease by -29.03% on average per year.
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 Y0.42%
EPS Next 2Y5.19%
EPS Next 3Y6.44%
EPS Next 5Y-29.03%
Revenue Next Year1.42%
Revenue Next 2Y4.69%
Revenue Next 3Y5.68%
Revenue Next 5Y8.32%
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
The Price/Earnings ratio is 13.95, which indicates a correct valuation of NTES.
NTES's Price/Earnings ratio is rather cheap when compared to the industry. NTES is cheaper than 84.51% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.73, NTES is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 12.11, the valuation of NTES can be described as correct.
Based on the Price/Forward Earnings ratio, NTES is valued cheaply inside the industry as 88.73% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.83, NTES is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.95 | ||
| Fwd PE | 12.11 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NTES is valued a bit cheaper than 78.87% 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 90.14% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12 | ||
| EV/EBITDA | 6.59 |
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.
The excellent profitability rating of NTES may justify a higher PE ratio.
PEG (NY)33.49
PEG (5Y)0.35
EPS Next 2Y5.19%
EPS Next 3Y6.44%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.65%, NTES has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.51, NTES pays a better dividend. On top of this NTES pays more dividend than 92.96% of the companies listed in the same industry.
NTES's Dividend Yield is comparable with the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
5.2 History
On average, the dividend of NTES grows each year by 41.17%, which is quite nice.
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 2Y5.19%
EPS Next 3Y6.44%
NETEASE INC-ADR
NASDAQ:NTES (12/20/2024, 8:00:01 PM)
After market: 92.09 0 (0%)92.09
+0.28 (+0.3%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners11.8%
Inst Owner Change2.7%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap59.35B
Analysts84.62
Price Target115.24 (25.14%)
Short Float %0.69%
Short Ratio2.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.65% |
Dividend Growth(5Y)41.17%
DP41.59%
Div Incr Years3
Div Non Decr Years3
Ex-Date
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)-2.24%
PT rev (3m)-4.29%
EPS NQ rev (1m)-7.38%
EPS NQ rev (3m)-7.38%
EPS NY rev (1m)-0.23%
EPS NY rev (3m)-1.52%
Revenue NQ rev (1m)-9.25%
Revenue NQ rev (3m)-9.25%
Revenue NY rev (1m)-0.67%
Revenue NY rev (3m)-1.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.95 | ||
| Fwd PE | 12.11 | ||
| P/S | 4.1 | ||
| P/FCF | 12 | ||
| P/OCF | 11.26 | ||
| P/B | 3.28 | ||
| P/tB | 3.28 | ||
| EV/EBITDA | 6.59 |
EPS(TTM)6.6
EY7.17%
EPS(NY)7.6
Fwd EY8.26%
FCF(TTM)7.67
FCFY8.33%
OCF(TTM)8.18
OCFY8.88%
SpS22.47
BVpS28.1
TBVpS28.1
PEG (NY)33.49
PEG (5Y)0.35
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
WACC7.29%
ROIC/WACC2.17
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 Y0.42%
EPS Next 2Y5.19%
EPS Next 3Y6.44%
EPS Next 5Y-29.03%
Revenue 1Y (TTM)3.94%
Revenue growth 3Y11.99%
Revenue growth 5Y15.12%
Sales Q2Q%-3.89%
Revenue Next Year1.42%
Revenue Next 2Y4.69%
Revenue Next 3Y5.68%
Revenue Next 5Y8.32%
EBIT growth 1Y13.28%
EBIT growth 3Y23.98%
EBIT growth 5Y22.67%
EBIT Next Year12.4%
EBIT Next 3Y10.48%
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%