NetEase Stock Analysis (NASDAQ:NTES)
NetEase Analysis Video
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.