NETEASE INC-ADR (NTES) Stock Fundamental Analysis
USA - NASDAQ:NTES - US64110W1027 - ADR
146.71 USD
-0.4 (-0.27%)
146.71 USD
0 (0%)
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. A decent growth rate in combination with a cheap valuation! Better keep an eye on NTES. With these ratings, NTES could be worth investigating further 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.
NTES had positive earnings in each of the past 5 years.
NTES had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 16.41%, NTES belongs to the top of the industry, outperforming 92.50% of the companies in the same industry.
NTES has a Return On Equity of 22.87%. This is amongst the best in the industry. NTES outperforms 87.50% of its industry peers.
Looking at the Return On Invested Capital, with a value of 17.40%, NTES belongs to the top of the industry, outperforming 95.00% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for NTES is significantly above the industry average of 9.23%.
The last Return On Invested Capital (17.40%) for NTES is above the 3 year average (14.54%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 31.19%, NTES belongs to the top of the industry, outperforming 97.50% of the companies in the same industry.
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.
In the last couple of years the Operating Margin of NTES has grown nicely.
NTES has a better Gross Margin (63.17%) than 71.25% of its industry peers.
NTES's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 31.43% | ||
| 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
NTES has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, NTES has less shares outstanding
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 0.25. 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.
NTES has a better Debt to FCF ratio (0.25) than 87.50% of its industry peers.
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/WACC2.55
WACC6.83%
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.
Looking at the Current ratio, with a value of 3.23, NTES belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
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.
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%.
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
Based on estimates for the next years, NTES will show a very negative growth in Earnings Per Share. The EPS will decrease by -26.15% on average per year.
Based on estimates for the next years, NTES will show a quite strong growth in Revenue. The Revenue will grow by 9.60% on average per year.
EPS Next Y21.6%
EPS Next 2Y13.79%
EPS Next 3Y12.28%
EPS Next 5Y-26.15%
Revenue Next Year8.55%
Revenue Next 2Y8.06%
Revenue Next 3Y8.26%
Revenue Next 5Y9.6%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
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 17.70, the valuation of NTES can be described as rather expensive.
83.75% of the companies in the same industry are more expensive than NTES, based on the Price/Earnings ratio.
NTES's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.91.
The Price/Forward Earnings ratio is 15.56, which indicates a correct valuation of NTES.
90.00% of the companies in the same industry are more expensive than NTES, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 22.92. NTES is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.7 | ||
| Fwd PE | 15.56 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NTES is valued a bit cheaper than the industry average as 76.25% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, NTES is valued cheaply inside the industry as 87.50% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.22 | ||
| EV/EBITDA | 11.93 |
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.
The excellent profitability rating of NTES may justify a higher PE ratio.
A more expensive valuation may be justified as NTES's earnings are expected to grow with 12.28% in the coming years.
PEG (NY)0.82
PEG (5Y)1.01
EPS Next 2Y13.79%
EPS Next 3Y12.28%
5. Dividend
5.1 Amount
NTES has a Yearly Dividend Yield of 1.94%.
Compared to an average industry Dividend Yield of 38.93, NTES pays a better dividend. On top of this NTES pays more dividend than 90.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, NTES has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
5.2 History
The dividend of NTES has a limited annual growth rate of 4.94%.
NTES has paid a dividend for at least 10 years, which is 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 2Y13.79%
EPS Next 3Y12.28%
146.71
-0.4 (-0.27%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners9.59%
Inst Owner Change0.04%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap94.55B
Revenue(TTM)109.68B
Net Income(TTM)34.21B
Analysts83.33
Price Target158.83 (8.26%)
Short Float %2.5%
Short Ratio4.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.94% |
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)0.82%
PT rev (3m)9.36%
EPS NQ rev (1m)-0.01%
EPS NQ rev (3m)-0.21%
EPS NY rev (1m)0.3%
EPS NY rev (3m)0.81%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.77%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.38%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.7 | ||
| Fwd PE | 15.56 | ||
| P/S | 6.14 | ||
| P/FCF | 15.22 | ||
| P/OCF | 14.47 | ||
| P/B | 4.5 | ||
| P/tB | 4.5 | ||
| EV/EBITDA | 11.93 |
EPS(TTM)8.29
EY5.65%
EPS(NY)9.43
Fwd EY6.43%
FCF(TTM)9.64
FCFY6.57%
OCF(TTM)10.14
OCFY6.91%
SpS23.89
BVpS32.58
TBVpS32.58
PEG (NY)0.82
PEG (5Y)1.01
Graham Number77.95
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
WACC6.83%
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)18.55%
EPS 3Y21.03%
EPS 5Y17.51%
EPS Q2Q%22.9%
EPS Next Y21.6%
EPS Next 2Y13.79%
EPS Next 3Y12.28%
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 2Y8.06%
Revenue Next 3Y8.26%
Revenue Next 5Y9.6%
EBIT growth 1Y18.69%
EBIT growth 3Y21.69%
EBIT growth 5Y16.49%
EBIT Next Year38.3%
EBIT Next 3Y18.56%
EBIT Next 5Y16.26%
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 7 / 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 21.6% in the next year.