(NTES) NetEase - Overview
Sector: Communication Services | Industry: Electronic Gaming & Multimedia | Exchange: NASDAQ (USA) | Market Cap: 74.675m USD | Total Return: 1.6% in 12m
Avg Turnover: 92.7M
EPS Trend: 85.7%
Qual. Beats: 1
Rev. Trend: 96.4%
Qual. Beats: 0
Warnings
No concerns identified
Tailwinds
Shakeout
NetEase, Inc. is a diversified internet technology company based in Hangzhou, China, primarily focused on interactive home entertainment, online education, and music streaming. The company operates four distinct segments: Games and Related Value-Added Services, Youdao, NetEase Cloud Music, and Innovative Businesses. Its core revenue driver is the development and operation of mobile and PC games, supplemented by licensed titles and game-themed merchandise.
The company has integrated advanced artificial intelligence into its education and productivity arms through its Youdao segment, deploying large language models and AI tutors to support language learning and digital content services. In the broader Chinese gaming sector, companies like NetEase often utilize a freemium business model, where core gameplay is free while monetization occurs through in-game microtransactions for virtual goods and services.
Beyond entertainment, NetEase maintains a hardware presence through smart devices and provides comprehensive online marketing services for global brands. Investors may find it useful to examine ValueRay for deeper insights into the companys valuation and market positioning. As a major player in the Interactive Home Entertainment sub-industry, NetEase competes globally by expanding its proprietary game development studios into international markets.
- Success of legacy titles and new mobile game launches drive revenue growth
- Regulatory shifts in Chinese gaming licenses impact long-term monetization and pipeline
- NetEase Cloud Music subscription growth improves margins amid competitive streaming landscape
- Expansion of AI-driven educational tools at Youdao accelerates segment profitability
- International studio acquisitions and global publishing efforts diversify geographical revenue mix
| Net Income: 34.1b TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.22 > 0.02 and ΔFCF/TA 1.83 > 1.0 |
| NWC/Revenue: 114.7% < 20% (prev 101.2%; Δ 13.54% < -1%) |
| CFO/TA 0.22 > 3% & CFO 52.0b > Net Income 34.1b |
| Net Debt (-160b) to EBITDA (40.2b): -3.97 < 3 |
| Current Ratio: 3.28 > 1.5 & < 3 |
| Outstanding Shares: last quarter (645.5m) vs 12m ago 0.65% < -2% |
| Gross Margin: 65.69% > 18% (prev 0.63%; Δ 6.51k% > 0.5%) |
| Asset Turnover: 52.93% > 50% (prev 53.41%; Δ -0.48% > 0%) |
| Interest Coverage Ratio: error (cannot be calculated; needs correct EBITDA TTM and Interest Expense TTM) |
| A: 0.57 (Total Current Assets 189b - Total Current Liabilities 57.4b) / Total Assets 231b |
| B: 0.65 (Retained Earnings 150b / Total Assets 231b) |
| C: 0.18 (EBIT TTM 38.1b / Avg Total Assets 216b) |
| D: 2.58 (Book Value of Equity 160b / Total Liabilities 62.0b) |
| Altman-Z'' = 9.73 = AAA |
| DSRI: 0.90 (Receivables 6.49b/6.74b, Revenue 114b/107b) |
| GMI: 0.95 (GM 65.69% / 62.71%) |
| AQI: 0.86 (AQ_t 0.15 / AQ_t-1 0.17) |
| SGI: 1.07 (Revenue 114b / 107b) |
| TATA: -0.08 (NI 34.1b - CFO 52.0b) / TA 231b) |
| Beneish M = -3.26 (Cap -4..+1) = AA |
As of May 27, 2026, the stock is trading at USD 123.34 with a total of 1,613,098 shares traded.
Over the past week, the price has changed by +8.56%,
over one month by +10.76%,
over three months by +7.91% and
over the past year by +1.61%.
NetEase has received a consensus analysts rating of 4.65. Therefore, it is recommended to buy NTES.
- StrongBuy: 22
- Buy: 7
- Hold: 2
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 162 | 31.4% |
Market Cap CNY = 507b (74.7b USD * 6.7948 USD.CNY)
P/E Trailing = 15.0
P/E Forward = 12.7389
P/S = 0.6528
P/B = 3.0841
P/EG = 1.288
Revenue TTM = 114b CNY
EBIT TTM = 38.1b CNY
EBITDA TTM = 40.2b CNY
Long Term Debt = unknown (0.0)
Short Term Debt = 11.0b CNY (from shortTermDebt, last quarter)
Debt = 11.3b CNY (from shortLongTermDebtTotal, last quarter) + Leases 345.3m
Net Debt = -160b CNY (calculated: Debt 11.3b - CCE 171b)
Enterprise Value = 348b CNY (507b + Debt 11.3b - CCE 171b)
Interest Coverage Ratio = unknown (Ebit TTM 38.1b / Interest Expense TTM 0.0)
EV/FCF = 6.91x (Enterprise Value 348b / FCF TTM 50.3b)
FCF Yield = 14.46% (FCF TTM 50.3b / Enterprise Value 348b)
FCF Margin = 43.97% (FCF TTM 50.3b / Revenue TTM 114b)
Net Margin = 29.84% (Net Income TTM 34.1b / Revenue TTM 114b)
Gross Margin = 65.69% ((Revenue TTM 114b - Cost of Revenue TTM 39.2b) / Revenue TTM)
Gross Margin QoQ = 69.36% (prev 64.23%)
Tobins Q-Ratio = 1.50 (Enterprise Value 348b / Total Assets 231b)
Interest Expense / Debt = 0.0% (Interest Expense 0.0 / Debt 11.3b)
Taxrate = 18.88% (2.52b / 13.4b)
NOPAT = 30.9b (EBIT 38.1b * (1 - 18.88%))
Current Ratio = 3.28 (Total Current Assets 189b / Total Current Liabilities 57.4b)
Debt / Equity = 0.07 (Debt 11.3b / totalStockholderEquity, last quarter 165b)
Debt / EBITDA = -3.97 (Net Debt -160b / EBITDA 40.2b)
Debt / FCF = -3.17 (Net Debt -160b / FCF TTM 50.3b)
Total Stockholder Equity = 158b (last 4 quarters mean from totalStockholderEquity)
RoA = 15.79% (Net Income 34.1b / Total Assets 231b)
RoE = 21.64% (Net Income TTM 34.1b / Total Stockholder Equity 158b)
RoCE = 24.12% (EBIT 38.1b / Capital Employed (Equity 158b + L.T.Debt 0.0))
RoIC = 16.70% (NOPAT 30.9b / Invested Capital 185b)
WACC = 7.50% (E(507b)/V(519b) * Re(7.67%) + D(11.3b)/V(519b) * Rd(0.0%) * (1-Tc(0.19)))
Discount Rate = 7.67% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -18.40 | Cagr: -0.30%
[DCF] Terminal Value 77.97% ; FCFF base≈46.2b ; Y1≈52.9b ; Y5≈77.9b
[DCF] Fair Price = 2.08k (EV 1172b - Net Debt -160b = Equity 1332b / Shares 640.7m; r=8.35% [WACC [floored]]; 5y FCF grow 15.0% → 2.50% )
EPS Correlation: 85.71 | EPS CAGR: 7.99% | SUE: 1.02 | # QB: 1
Revenue Correlation: 96.43 | Revenue CAGR: 4.70% | SUE: 0.09 | # QB: 0
EPS current Quarter (2026-06-30): EPS=15.89 | Chg30d=+6.29% | Revisions=-20% | Analysts=9
EPS next Quarter (2026-09-30): EPS=15.72 | Chg30d=+3.50% | Revisions=-20% | Analysts=7
EPS current Year (2026-12-31): EPS=65.04 | Chg30d=+3.50% | Revisions=+0% | GrowthEPS=+12.2% | GrowthRev=+7.7%
EPS next Year (2027-12-31): EPS=71.71 | Chg30d=+2.81% | Revisions=-20% | GrowthEPS=+10.3% | GrowthRev=+8.3%
[Analyst] Revisions Ratio: -20%