NetEase Stock Analysis (NASDAQ:NTES)

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$289.25 $0.27 (0.09%) NTES stock closing price Mar 27, 2017 (Closing)
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NetEase
Updated on : Mar 27, 2017
previous close
NTES 289.3 (0%)
NASDAQ 5840.4 (0%)
Closing Price On: Mar 27, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Internet Software-Services
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2016-Q4
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
37.6%
Operating Profit
Operating Margin:
31.9%
Sector Average:
2.7%
5 Quarter Net Profit
Net Margins
2016-Q4
%
LTM Margin
Compared to the industry
Cash Flow
Operating cash flow:
$1.67B
Net Income:
$530.5M
Dividend Yield
NTES dividend yield:
1.01%
PROS      CONS
Recent Growth
Long Term Growth
Operating Margins
Net Margins
Cash Flow
ROIC
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
NTES PS :
6.7
Industry PS :
2.6
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
235.7%
Return on Equity:
34.5%
Free Cash Flow Margin:
88%
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NetEase Analysis Video

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View NetEase stock analysis video. This is our NTES analyst opinion covering the buy and sell arguments for NTES stock.

NetEase Inc (ADR) Stock Rating (4.4/5)

Our NetEase stock opinion is based on fundamentals of the company. This NetEase stock analysis is based on latest Q4 earnings for 2016. The stock price analysis takes into account a company's valuation metrics.

Should you buy NTES stock?

  • NetEase's revenue growth came in at 42.8% in 2016 Q4.
  • Revenue growth has been tremendous with a compounded annual growth of 37.6% over the last 5 years.
  • The TTM operating margin was good at 31.9% for NetEase.
  • Net margins came in at average 30.4% for NetEase over the last twelve months.
  • The company has an operating cash flow which is 3.2 times the net income.
  • The NetEase stock currently trades at a price to earnings ratio of 21.6. We rate this as a positive, compared to the industry average of 25.6.
  • NetEase's return on invested capital of 235.7% is good.
  • The LTM ROE of 34.5% for NetEase is attractive.
  • The company has a healthy free cash flow margin of 88%.

Should you sell NTES stock?

  • The company is trading at a price to sales multiple of 6.7, which is overvalued in comparison to the Internet Software-Services industry average multiple of 2.6.

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