NETEASE INC-ADR (NTES) Stock Fundamental Analysis
USA - NASDAQ:NTES - US64110W1027 - ADR
146.84 USD
-4.05 (-2.68%)
Overall NTES gets a fundamental rating of 7 out of 10. We evaluated NTES against 80 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 is valued quite cheap, while showing a decent growth score. This is a good combination! These ratings could make NTES a good candidate for value and quality investing.
1. Profitability
1.1 Basic Checks
In the past year NTES was profitable.
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
The Return On Assets of NTES (16.41%) is better than 93.75% of its industry peers.
NTES has a Return On Equity of 22.87%. This is amongst the best in the industry. NTES outperforms 91.25% of its industry peers.
The Return On Invested Capital of NTES (17.40%) is better than 95.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NTES is significantly above the industry average of 9.25%.
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 97.50% of its industry peers.
NTES's Profit Margin has declined in the last couple of years.
NTES's Operating Margin of 31.43% is amongst the best of the industry. NTES outperforms 98.75% of its industry peers.
NTES's Operating Margin has improved in the last couple of years.
NTES has a Gross Margin of 63.17%. This is in the better half of the industry: NTES outperforms 71.25% of its industry peers.
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.
Compared to 1 year ago, NTES has less shares outstanding
NTES has less shares outstanding than it did 5 years ago.
NTES has a better debt/assets ratio than last year.
2.2 Solvency
NTES has a debt to FCF ratio of 0.25. This is a very positive value and a sign of high solvency as it would only need 0.25 years to pay back of all of its debts.
With an excellent Debt to FCF ratio value of 0.25, NTES belongs to the best of the industry, outperforming 88.75% of the companies in the same industry.
A Debt/Equity ratio of 0.08 indicates that NTES is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.08, NTES is in the better half of the industry, outperforming 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.08 | ||
| Debt/FCF | 0.25 | ||
| Altman-Z | N/A |
ROIC/WACC2.54
WACC6.85%
2.3 Liquidity
NTES has a Current Ratio of 3.23. This indicates that NTES is financially healthy and has no problem in meeting its short term obligations.
NTES has a better Current ratio (3.23) than 90.00% of its industry peers.
A Quick Ratio of 3.22 indicates that NTES has no problem at all paying its short term obligations.
NTES has a Quick ratio of 3.22. This is amongst the best in the industry. NTES outperforms 90.00% of its industry peers.
| 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.
Measured over the past years, NTES shows a quite strong growth in Earnings Per Share. The EPS has been growing by 17.51% on average per year.
The Revenue has been growing slightly by 2.74% in the past year.
NTES shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.19% yearly.
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 9.49% on average over the next years. This is quite good.
EPS Next Y21.23%
EPS Next 2Y13.42%
EPS Next 3Y12.44%
EPS Next 5Y-26.15%
Revenue Next Year8.55%
Revenue Next 2Y8.05%
Revenue Next 3Y8.17%
Revenue Next 5Y9.49%
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
With a Price/Earnings ratio of 17.71, NTES is valued on the expensive side.
Based on the Price/Earnings ratio, NTES is valued cheaply inside the industry as 86.25% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.06, NTES is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 15.68, the valuation of NTES can be described as correct.
Based on the Price/Forward Earnings ratio, NTES is valued cheaper than 87.50% of the companies in the same industry.
NTES's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.64.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.71 | ||
| Fwd PE | 15.68 |
4.2 Price Multiples
77.50% 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 90.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.23 | ||
| EV/EBITDA | 12.4 |
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.
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 12.44% in the coming years.
PEG (NY)0.83
PEG (5Y)1.01
EPS Next 2Y13.42%
EPS Next 3Y12.44%
5. Dividend
5.1 Amount
NTES has a Yearly Dividend Yield of 1.89%.
NTES's Dividend Yield is rather good when compared to the industry average which is at 20.19. NTES pays more dividend than 90.00% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.38, NTES is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
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
36.90% of the earnings are spent on dividend by NTES. This is a low number and sustainable payout ratio.
DP36.9%
EPS Next 2Y13.42%
EPS Next 3Y12.44%
NASDAQ:NTES (9/26/2025, 10:31:08 AM)
146.84
-4.05 (-2.68%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners12.06%
Inst Owner Change-23.06%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap94.64B
Analysts82.22
Price Target157.54 (7.29%)
Short Float %1.68%
Short Ratio2.87
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
Yearly Dividend2.45
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)6.37%
PT rev (3m)8.52%
EPS NQ rev (1m)0.28%
EPS NQ rev (3m)-0.15%
EPS NY rev (1m)0%
EPS NY rev (3m)1.07%
Revenue NQ rev (1m)0.57%
Revenue NQ rev (3m)0.69%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)0.42%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.71 | ||
| Fwd PE | 15.68 | ||
| P/S | 6.15 | ||
| P/FCF | 15.23 | ||
| P/OCF | 14.48 | ||
| P/B | 4.51 | ||
| P/tB | 4.51 | ||
| EV/EBITDA | 12.4 |
EPS(TTM)8.29
EY5.65%
EPS(NY)9.37
Fwd EY6.38%
FCF(TTM)9.64
FCFY6.57%
OCF(TTM)10.14
OCFY6.91%
SpS23.89
BVpS32.58
TBVpS32.58
PEG (NY)0.83
PEG (5Y)1.01
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%
ROICexcg growth 3Y31.39%
ROICexcg 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
WACC6.85%
ROIC/WACC2.54
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 Y21.23%
EPS Next 2Y13.42%
EPS Next 3Y12.44%
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 2Y8.05%
Revenue Next 3Y8.17%
Revenue Next 5Y9.49%
EBIT growth 1Y18.69%
EBIT growth 3Y21.69%
EBIT growth 5Y16.49%
EBIT Next Year36.95%
EBIT Next 3Y17.61%
EBIT Next 5Y16.14%
FCF growth 1Y65.97%
FCF growth 3Y19.76%
FCF growth 5Y21.96%
OCF growth 1Y54.29%
OCF growth 3Y16.76%
OCF growth 5Y18.17%