NetEase Stock Analysis (NASDAQ:NTES)

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$312.15 $3.26 (1.06%) NTES stock closing price Jul 26, 2017 (Closing)
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NetEase
Updated on : Jul 26, 2017
previous close
NTES 312.2 (0%)
NASDAQ 6422.8 (0%)
Closing Price On: Jul 26, 2017
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Internet Software-Services
Sector :
Computer and Technology
5 Quarter Revenue
Revenue Growth
2017-Q1
$billion
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
39.2%
Operating Profit
Operating Margin:
32%
Sector Average:
6%
5 Quarter Net Profit
Net Margins
2017-Q1
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
651.4M
Debt/Equity Ratio:
 0.11
Compared to the industry
Cash Flow
Operating cash flow:
$585.7M
Net Income:
$569.9M
Dividend Yield
NTES dividend yield:
1.06%
PROS      CONS
Recent Growth
Long Term Growth
Operating Margins
Net Margins
Low Debt Burden
ROIC
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
NTES PS :
6.4
Industry PS :
2.8
Sector:   Computer and Technology.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
277.9%
Return on Equity:
36%
Free Cash Flow Margin:
27.2%
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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 Q1 earnings for 2017. The stock price analysis takes into account a company's valuation metrics.

Should you buy NTES stock?

  • NetEase's revenue growth came in at 61.4% in 2017 Q1.
  • The company saw a significant growth in revenue with a 5 year CAGR of 39.2%.
  • NetEase had a healthy average operating margin of 32% over the last 4 quarters.
  • Net margins stood at a healthy 29.8% (average) for NetEase in the Trailing Twelve Months.
  • With a debt/equity ratio of  0.11, NetEase is comparatively less leveraged than its peers in the Computer and Technology sector.
  • The NetEase stock currently trades at a price to earnings ratio of 21.1. We rate this as a positive, compared to the industry average of 26.8.
  • NetEase has an attractive ROIC (Return on Invested Capital) of 277.9%
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for NetEase at 36%.
  • NetEase has a healthy FCF (Free Cash Flow) margin of 27.2%.

Should you sell NTES stock?

  • The company is trading at a price to sales multiple of 6.4, which is overvalued in comparison to the Internet Software-Services industry average multiple of 2.8.

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