139.14 USD
+2.88 (+2.11%)
140.08 USD
+0.94 (+0.68%)
We assign a fundamental rating of 7 out of 10 to NTES. NTES was compared to 80 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.
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
With an excellent Return On Assets value of 16.92%, NTES belongs to the best of the industry, outperforming 92.50% of the companies in the same industry.
NTES's Return On Equity of 23.22% is amongst the best of the industry. NTES outperforms 90.00% of its industry peers.
With an excellent Return On Invested Capital value of 17.58%, NTES belongs to the best of the industry, outperforming 93.75% of the companies in the same industry.
NTES had an Average Return On Invested Capital over the past 3 years of 14.54%. This is significantly above the industry average of 8.91%.
The 3 year average ROIC (14.54%) for NTES is below the current ROIC(17.58%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.92% | ||
| ROE | 23.22% | ||
| ROIC | 17.58% |
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 32.45%. This is amongst the best in the industry. NTES outperforms 97.50% of its industry peers.
In the last couple of years the Profit Margin of NTES has declined.
NTES's Operating Margin of 31.60% is amongst the best of the industry. NTES outperforms 98.75% of its industry peers.
In the last couple of years the Operating Margin of NTES has grown nicely.
The Gross Margin of NTES (63.47%) is better than 71.25% of its industry peers.
NTES's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.6% | ||
| PM (TTM) | 32.45% | ||
| GM | 63.47% |
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.
The number of shares outstanding for NTES has been reduced 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 0.16. This is a very positive value and a sign of high solvency as it would only need 0.16 years to pay back of all of its debts.
NTES has a better Debt to FCF ratio (0.16) than 91.25% of its industry peers.
NTES has a Debt/Equity ratio of 0.05. This is a healthy value indicating a solid balance between debt and equity.
NTES's Debt to Equity ratio of 0.05 is fine compared to the rest of the industry. NTES outperforms 67.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.05 | ||
| Debt/FCF | 0.16 | ||
| Altman-Z | N/A |
ROIC/WACC2.55
WACC6.9%
2.3 Liquidity
A Current Ratio of 3.42 indicates that NTES has no problem at all paying its short term obligations.
NTES's Current ratio of 3.42 is amongst the best of the industry. NTES outperforms 88.75% of its industry peers.
NTES has a Quick Ratio of 3.41. This indicates that NTES is financially healthy and has no problem in meeting its short term obligations.
NTES's Quick ratio of 3.41 is amongst the best of the industry. NTES outperforms 88.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.42 | ||
| Quick Ratio | 3.41 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 29.11% over the past year.
The Earnings Per Share has been growing by 17.51% on average over the past years. This is quite good.
The Revenue has been growing slightly by 5.81% in the past year.
The Revenue has been growing by 12.19% on average over the past years. This is quite good.
EPS 1Y (TTM)29.11%
EPS 3Y21.03%
EPS 5Y17.51%
EPS Q2Q%26.66%
Revenue 1Y (TTM)5.81%
Revenue growth 3Y6.32%
Revenue growth 5Y12.19%
Sales Q2Q%8.2%
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.
NTES is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 9.64% yearly.
EPS Next Y20.48%
EPS Next 2Y12.73%
EPS Next 3Y12.08%
EPS Next 5Y-26.15%
Revenue Next Year7.63%
Revenue Next 2Y7.72%
Revenue Next 3Y8.19%
Revenue Next 5Y9.64%
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.
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 15.79, which indicates a correct valuation of NTES.
Based on the Price/Earnings ratio, NTES is valued cheaper than 86.25% of the companies in the same industry.
NTES's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.56.
Based on the Price/Forward Earnings ratio of 14.89, the valuation of NTES can be described as correct.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NTES indicates a rather cheap valuation: NTES is cheaper than 90.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.79, NTES is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.79 | ||
| Fwd PE | 14.89 |
4.2 Price Multiples
NTES's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. NTES is cheaper than 77.50% 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 92.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.53 | ||
| EV/EBITDA | 9.74 |
4.3 Compensation for Growth
NTES's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
NTES has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as NTES's earnings are expected to grow with 12.08% in the coming years.
PEG (NY)0.77
PEG (5Y)0.9
EPS Next 2Y12.73%
EPS Next 3Y12.08%
5. Dividend
5.1 Amount
NTES has a Yearly Dividend Yield of 2.22%.
NTES's Dividend Yield is rather good when compared to the industry average which is at 7.71. NTES pays more dividend than 91.25% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.87, NTES has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
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
36.47% of the earnings are spent on dividend by NTES. This is a low number and sustainable payout ratio.
DP36.47%
EPS Next 2Y12.73%
EPS Next 3Y12.08%
139.14
+2.88 (+2.11%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners10.4%
Inst Owner Change7.83%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap89.67B
Revenue(TTM)111.83B
Net Income(TTM)36.28B
Analysts83.89
Price Target167.93 (20.69%)
Short Float %1.53%
Short Ratio2.71
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.22% |
Yearly Dividend2.48
Dividend Growth(5Y)4.94%
DP36.47%
Div Incr Years3
Div Non Decr Years3
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.48%
Min EPS beat(2)-2.68%
Max EPS beat(2)-2.28%
EPS beat(4)2
Avg EPS beat(4)8.52%
Min EPS beat(4)-2.68%
Max EPS beat(4)22.83%
EPS beat(8)3
Avg EPS beat(8)1.78%
EPS beat(12)6
Avg EPS beat(12)8.87%
EPS beat(16)10
Avg EPS beat(16)14.26%
Revenue beat(2)0
Avg Revenue beat(2)-4.28%
Min Revenue beat(2)-4.64%
Max Revenue beat(2)-3.91%
Revenue beat(4)0
Avg Revenue beat(4)-3.21%
Min Revenue beat(4)-4.64%
Max Revenue beat(4)-0.78%
Revenue beat(8)0
Avg Revenue beat(8)-3.59%
Revenue beat(12)0
Avg Revenue beat(12)-3.49%
Revenue beat(16)1
Avg Revenue beat(16)-2.65%
PT rev (1m)2.28%
PT rev (3m)6.6%
EPS NQ rev (1m)-2.48%
EPS NQ rev (3m)-2.88%
EPS NY rev (1m)-1%
EPS NY rev (3m)-0.62%
Revenue NQ rev (1m)-0.96%
Revenue NQ rev (3m)-0.86%
Revenue NY rev (1m)-0.86%
Revenue NY rev (3m)-0.85%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.79 | ||
| Fwd PE | 14.89 | ||
| P/S | 5.66 | ||
| P/FCF | 13.53 | ||
| P/OCF | 12.93 | ||
| P/B | 4.05 | ||
| P/tB | 4.05 | ||
| EV/EBITDA | 9.74 |
EPS(TTM)8.81
EY6.33%
EPS(NY)9.34
Fwd EY6.72%
FCF(TTM)10.29
FCFY7.39%
OCF(TTM)10.76
OCFY7.73%
SpS24.59
BVpS34.37
TBVpS34.37
PEG (NY)0.77
PEG (5Y)0.9
Graham Number82.54
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.92% | ||
| ROE | 23.22% | ||
| ROCE | 21.49% | ||
| ROIC | 17.58% | ||
| ROICexc | 133.28% | ||
| ROICexgc | 133.28% | ||
| OM | 31.6% | ||
| PM (TTM) | 32.45% | ||
| GM | 63.47% | ||
| FCFM | 41.82% |
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 Turnover0.52
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.05 | ||
| Debt/FCF | 0.16 | ||
| Debt/EBITDA | 0.2 | ||
| Cap/Depr | 97.24% | ||
| Cap/Sales | 1.93% | ||
| Interest Coverage | 89.69 | ||
| Cash Conversion | 130.26% | ||
| Profit Quality | 128.89% | ||
| Current Ratio | 3.42 | ||
| Quick Ratio | 3.41 | ||
| Altman-Z | N/A |
F-Score8
WACC6.9%
ROIC/WACC2.55
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)29.11%
EPS 3Y21.03%
EPS 5Y17.51%
EPS Q2Q%26.66%
EPS Next Y20.48%
EPS Next 2Y12.73%
EPS Next 3Y12.08%
EPS Next 5Y-26.15%
Revenue 1Y (TTM)5.81%
Revenue growth 3Y6.32%
Revenue growth 5Y12.19%
Sales Q2Q%8.2%
Revenue Next Year7.63%
Revenue Next 2Y7.72%
Revenue Next 3Y8.19%
Revenue Next 5Y9.64%
EBIT growth 1Y23.42%
EBIT growth 3Y21.69%
EBIT growth 5Y16.49%
EBIT Next Year35.36%
EBIT Next 3Y18.53%
EBIT Next 5Y16.3%
FCF growth 1Y64.95%
FCF growth 3Y19.76%
FCF growth 5Y21.96%
OCF growth 1Y50.4%
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 20.48% in the next year.