NETEASE INC-ADR (NTES) Stock Fundamental Analysis
USA - NASDAQ:NTES - US64110W1027 - ADR
135.04 USD
+1.62 (+1.21%)
NTES gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 79 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings could make NTES a good candidate 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.
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
NTES has a better Return On Assets (16.41%) than 92.41% of its industry peers.
NTES's Return On Equity of 22.87% is amongst the best of the industry. NTES outperforms 88.61% of its industry peers.
NTES has a better Return On Invested Capital (17.40%) than 93.67% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NTES is above the industry average of 9.82%.
The 3 year average ROIC (14.54%) for NTES is below the current ROIC(17.40%), indicating increased profibility in the last year.
| 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 has a better Profit Margin (31.19%) than 97.47% of its industry peers.
In the last couple of years the Profit Margin of NTES has declined.
NTES has a Operating Margin of 31.43%. This is amongst the best in the industry. NTES outperforms 98.73% of its industry peers.
NTES's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 63.17%, NTES is doing good in the industry, outperforming 70.89% of the companies in the same industry.
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
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.
NTES has a better debt/assets ratio than last year.
2.2 Solvency
The Debt to FCF ratio of NTES is 0.25, which is an excellent value as it means it would take NTES, only 0.25 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.25, NTES belongs to the best 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.
The Debt to Equity ratio of NTES (0.08) is better than 60.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.08 | ||
| Debt/FCF | 0.25 | ||
| Altman-Z | N/A |
ROIC/WACC2.57
WACC6.77%
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.
With an excellent Quick ratio value of 3.22, NTES belongs to the best of the industry, outperforming 89.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.23 | ||
| Quick Ratio | 3.22 |
3. Growth
3.1 Past
NTES shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 18.55%, which is quite good.
NTES shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.51% yearly.
NTES shows a small growth in Revenue. In the last year, the Revenue has grown by 2.74%.
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
The Revenue is expected to grow by 9.66% on average over the next years. This is quite good.
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
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
Based on the Price/Earnings ratio of 16.27, the valuation of NTES can be described as correct.
Based on the Price/Earnings ratio, NTES is valued cheaply inside the industry as 84.81% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of NTES to the average of the S&P500 Index (25.47), we can say NTES is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 14.29, the valuation of NTES can be described as correct.
Based on the Price/Forward Earnings ratio, NTES is valued cheaper than 87.34% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.42. NTES is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.27 | ||
| Fwd PE | 14.29 |
4.2 Price Multiples
75.95% of the companies in the same industry are more expensive than NTES, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NTES indicates a rather cheap valuation: NTES is cheaper than 88.61% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 13.98 | ||
| EV/EBITDA | 10.18 |
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.
NTES's earnings are expected to grow with 12.78% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.75
PEG (5Y)0.93
EPS Next 2Y13.82%
EPS Next 3Y12.78%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.08%, NTES has a reasonable but not impressive dividend return.
NTES's Dividend Yield is rather good when compared to the industry average which is at 41.59. NTES pays more dividend than 91.14% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, NTES has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.08% |
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%
NASDAQ:NTES (11/20/2025, 2:03:09 PM)
135.04
+1.62 (+1.21%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners9.59%
Inst Owner Change7.79%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap87.03B
Revenue(TTM)109.68B
Net Income(TTM)34.21B
Analysts83.89
Price Target164.55 (21.85%)
Short Float %1.66%
Short Ratio3.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.08% |
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%
EPS NQ rev (3m)-0.23%
EPS NY rev (1m)0.08%
EPS NY rev (3m)0.89%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)1.18%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.28%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.27 | ||
| Fwd PE | 14.29 | ||
| P/S | 5.64 | ||
| P/FCF | 13.98 | ||
| P/OCF | 13.29 | ||
| P/B | 4.14 | ||
| P/tB | 4.14 | ||
| EV/EBITDA | 10.18 |
EPS(TTM)8.3
EY6.15%
EPS(NY)9.45
Fwd EY7%
FCF(TTM)9.66
FCFY7.15%
OCF(TTM)10.16
OCFY7.52%
SpS23.93
BVpS32.64
TBVpS32.64
PEG (NY)0.75
PEG (5Y)0.93
Graham Number78.08
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
WACC6.77%
ROIC/WACC2.57
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.