NetEase, the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Saiyi He from CMB International Securities maintained a Buy rating on the stock and has a $164.00 price target.
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Saiyi He has given his Buy rating due to a combination of factors that highlight NetEase’s strong performance and future potential. The company’s games business has shown robust growth, with a 12% year-over-year increase in revenue, driven by the solid performance of legacy titles and a promising pipeline of new games. Notably, titles like Fantasy Westward Journey Online and Eggy Party have achieved record player engagement, while Where Winds Meet has seen success both domestically and internationally.
Despite a slight decline in non-gaming segments, NetEase’s focus on developing high-quality games is expected to sustain its growth trajectory. The company has optimized its revenue mix towards higher-margin domestic PC games, which has contributed to an improved gross profit margin. Looking forward, the anticipated launch of several highly-anticipated games is likely to bolster NetEase’s market position, justifying the Buy rating.
According to TipRanks, He is a 5-star analyst with an average return of 16.7% and a 61.87% success rate. He covers the Communication Services sector, focusing on stocks such as Kuaishou Technology Class B, Tencent Holdings , and Baidu.
In another report released today, Bernstein also assigned a Buy rating to the stock with a $155.00 price target.