NetEase, Inc. Fundamental Analysis
NetEase, Inc. (NTES) shows moderate financial fundamentals with a PE ratio of 15.93, profit margin of 29.84%, and ROE of 21.64%. The company generates $114.2B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 99.2/100 based on profitability, valuation, growth, and balance sheet metrics. The A grade reflects excellent fundamentals and strong overall stability.
Fundamental Health Score
We analyze NTES's fundamental strength across five key dimensions:
Efficiency Score
ExcellentNTES demonstrates superior asset utilization.
Valuation Score
ExcellentNTES trades at attractive valuation levels.
Growth Score
ModerateNTES shows steady but slowing expansion.
Financial Health Score
ExcellentNTES maintains a strong and stable balance sheet.
Profitability Score
ExcellentNTES achieves industry-leading margins.
Key Financial Metrics
Is NTES Expensive or Cheap?
P/E Ratio
NTES trades at 15.93 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, NTES's PEG of 0.45 indicates potential undervaluation.
Price to Book
The market values NetEase, Inc. at 3.30 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 14.48 times EBITDA. This signals the market has high growth expectations.
How Well Does NTES Make Money?
Net Profit Margin
For every $100 in sales, NetEase, Inc. keeps $29.84 as profit after all expenses.
Operating Margin
Core operations generate 33.26 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $21.64 in profit for every $100 of shareholder equity.
ROA
NetEase, Inc. generates $14.75 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
NetEase, Inc. generates strong operating cash flow of $51.92B, reflecting robust business health.
Free Cash Flow
NetEase, Inc. generates strong free cash flow of $50.20B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $78.64 in free cash annually.
FCF Yield
NTES converts 9.27% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
15.93
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.45
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.30
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.75
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.07
vs 25 benchmark
Current Ratio
Current assets to current liabilities
3.28
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.22
vs 25 benchmark
ROA
Return on assets percentage
0.15
vs 25 benchmark
ROCE
Return on capital employed
0.22
vs 25 benchmark
How NTES Stacks Against Its Sector Peers
| Metric | NTES Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 15.93 | 42.32 | Better (Cheaper) |
| ROE | 21.64% | 764.00% | Weak |
| Net Margin | 29.84% | 10929058400.00% | Weak |
| Debt/Equity | 0.07 | 0.55 | Strong (Low Leverage) |
| Current Ratio | 3.28 | 5.24 | Strong Liquidity |
| ROA | 14.75% | 103.00% | Weak |
NTES outperforms its industry in 3 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews NetEase, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Growth, Innovation, High Beta
EPS CAGR
N/A
Industry Style: Growth, Innovation, High Beta
FCF CAGR
N/A
Industry Style: Growth, Innovation, High Beta