NETEASE INC-ADR (NTES)
US64110W1027 - ADR
Overall NTES gets a fundamental rating of 7 out of 10. We evaluated NTES against 76 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 has a correct valuation and a medium growth rate. These ratings could make NTES a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year NTES was profitable.
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
NTES's Return On Assets of 15.82% is amongst the best of the industry. NTES outperforms 97.40% of its industry peers.
NTES has a Return On Equity of 23.67%. This is amongst the best in the industry. NTES outperforms 92.21% of its industry peers.
NTES has a Return On Invested Capital of 15.15%. This is amongst the best in the industry. NTES outperforms 93.51% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NTES is significantly below the industry average of 36.58%.
The last Return On Invested Capital (15.15%) for NTES is above the 3 year average (12.62%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.82% | ||
| ROE | 23.67% | ||
| ROIC | 15.15% |
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
The Profit Margin of NTES (28.43%) is better than 97.40% of its industry peers.
NTES's Profit Margin has improved in the last couple of years.
NTES has a Operating Margin of 26.78%. This is amongst the best in the industry. NTES outperforms 97.40% of its industry peers.
NTES's Operating Margin has improved in the last couple of years.
NTES has a better Gross Margin (60.95%) than 79.22% of its industry peers.
NTES's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 26.78% | ||
| PM (TTM) | 28.43% | ||
| GM | 60.95% |
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), NTES is creating value.
The number of shares outstanding for NTES remains at a similar level compared to 1 year ago.
The number of shares outstanding for NTES has been increased compared to 5 years ago.
Compared to 1 year ago, NTES has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of NTES is 0.63, which is an excellent value as it means it would take NTES, only 0.63 years of fcf income to pay off all of its debts.
With an excellent Debt to FCF ratio value of 0.63, NTES belongs to the best of the industry, outperforming 94.81% of the companies in the same industry.
A Debt/Equity ratio of 0.16 indicates that NTES is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.16, NTES is in line with its industry, outperforming 58.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | 0.63 | ||
| Altman-Z | N/A |
ROIC/WACC2.08
WACC7.3%
2.3 Liquidity
NTES has a Current Ratio of 2.65. This indicates that NTES is financially healthy and has no problem in meeting its short term obligations.
NTES has a better Current ratio (2.65) than 79.22% of its industry peers.
A Quick Ratio of 2.64 indicates that NTES has no problem at all paying its short term obligations.
The Quick ratio of NTES (2.64) is better than 79.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.65 | ||
| Quick Ratio | 2.64 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 44.94% over the past year.
The Earnings Per Share has been growing by 39.56% on average over the past years. This is a very strong growth
NTES shows a small growth in Revenue. In the last year, the Revenue has grown by 7.22%.
Measured over the past years, NTES shows a quite strong growth in Revenue. The Revenue has been growing by 15.12% on average per year.
EPS 1Y (TTM)44.94%
EPS 3Y31.41%
EPS 5Y39.56%
EPS growth Q2Q54.42%
Revenue 1Y (TTM)7.22%
Revenue growth 3Y11.99%
Revenue growth 5Y15.12%
Revenue growth Q2Q7.04%
3.2 Future
The Earnings Per Share is expected to grow by 8.32% on average over the next years. This is quite good.
Based on estimates for the next years, NTES will show a quite strong growth in Revenue. The Revenue will grow by 9.13% on average per year.
EPS Next Y6.21%
EPS Next 2Y8.1%
EPS Next 3Y8.32%
EPS Next 5YN/A
Revenue Next Year9.52%
Revenue Next 2Y9.6%
Revenue Next 3Y9.1%
Revenue Next 5Y9.13%
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
A Price/Earnings ratio of 13.87 indicates a correct valuation of NTES.
Based on the Price/Earnings ratio, NTES is valued cheaply inside the industry as 87.01% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 24.84, NTES is valued a bit cheaper.
A Price/Forward Earnings ratio of 13.06 indicates a correct valuation of NTES.
NTES's Price/Forward Earnings ratio is rather cheap when compared to the industry. NTES is cheaper than 90.91% 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 21.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.87 | ||
| Fwd PE | 13.06 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, NTES is valued cheaply inside the industry as 81.82% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of NTES indicates a rather cheap valuation: NTES is cheaper than 90.91% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.45 | ||
| EV/EBITDA | 6.77 |
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.
NTES has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)2.23
PEG (5Y)0.35
EPS Next 2Y8.1%
EPS Next 3Y8.32%
5. Dividend
5.1 Amount
NTES has a Yearly Dividend Yield of 2.71%.
NTES's Dividend Yield is rather good when compared to the industry average which is at 12.28. NTES pays more dividend than 93.51% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, NTES has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
5.2 History
The dividend of NTES is nicely growing with an annual growth rate of 41.11%!
NTES has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of NTES decreased in the last 3 years.
Dividend Growth(5Y)41.11%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
27.24% of the earnings are spent on dividend by NTES. This is a low number and sustainable payout ratio.
The dividend of NTES is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP27.24%
EPS Next 2Y8.1%
EPS Next 3Y8.32%
NETEASE INC-ADR
NASDAQ:NTES (4/26/2024, 7:07:03 PM)
After market: 96.57 +0.58 (+0.6%)95.99
+1.87 (+1.99%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap61.91B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.87 | ||
| Fwd PE | 13.06 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.23
PEG (5Y)0.35
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.82% | ||
| ROE | 23.67% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 26.78% | ||
| PM (TTM) | 28.43% | ||
| GM | 60.95% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.16 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.65 | ||
| Quick Ratio | 2.64 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)44.94%
EPS 3Y31.41%
EPS 5Y
EPS growth Q2Q
EPS Next Y6.21%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.22%
Revenue growth 3Y11.99%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y