NetEase (NTES) AI Stock Analysis

• Market Cap: $87.85B
• Dividend Yield: 2.19%
• Average Volume (3M): 480.24K
• Price to Earnings (P/E): 18.3
• Beta (1Y): 0.53
• Revenue Growth: 5.69%
• EPS Growth: 32.87%
• Country: US
• Employees: 26,028
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 2.11
• Shares Outstanding: 633,591,800
• 10 Day Avg. Volume: 473,708
• 30 Day Avg. Volume: 480,243
• PEG Ratio: 9.97
• Price to Book (P/B): 3.03
• Price to Sales (P/S): 4.00
• P/FCF Ratio: 11.23
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 0.69
• Enterprise Value/Gross Profit: 1.09
• Enterprise Value/Ebitda: 2.06
• 1Y Price Target: $157.33
• Price Target Upside: 7.92% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 81 Outperform
• Price Target: $161.00 ▲(10.44% Upside)

NetEase's strong financial performance and successful strategic initiatives in gaming and global expansion are the primary drivers of the high score. While technical indicators show some short-term weakness, the company's robust financial health and fair valuation support a positive outlook.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial stability and expansion.

Strong Cash Flow

Robust cash flow generation enhances liquidity, enabling ongoing investments and shareholder returns, crucial for sustained growth.

Successful Game Launches

Successful game launches expand market reach and user base, driving revenue and reinforcing NetEase's position in the gaming industry.

Negative Factors

Decline in Innovative Business Revenues

Declining revenues in innovative segments may hinder diversification efforts, impacting long-term growth and competitive positioning.

NetEase Cloud Music Revenue Decline

Revenue decline in Cloud Music suggests challenges in monetization, potentially affecting overall revenue diversification and growth.

Challenges in Innovative Business

Struggles in innovative business segments could limit future growth opportunities and weaken competitive advantage in new markets.

NetEase Business Overview & Revenue Model

Company Description

NetEase, Inc. engages in online games, music streaming, online intelligent learning services, and internet content services businesses in China and internationally. The company operates through Games and Related Value-Added Services; Youdao; Cloud Music; and Innovative Businesses and Others segments. It develops and operates PC and mobile games, as well as offers games licensed from other game developers. The company's products and services include Youdao Dictionary, an online knowledge tool; Youdao Translation, a tool specifically designed to support translation needs of business and leisure travelers; U-Dictionary, an online dictionary and translation app; Youdao Kids' Dictionary, a smart and fun tool; smart devices, such as Youdao Dictionary Pen, Youdao Smart Learning Pad, and Youdao Listening Pod; online courses; interactive learning apps; and education digitalization solutions, such as Youdao Smart Learning Terminal, a device that automates paper-based homework processing; Youdao Smart Cloud, a cloud-based platform that allows third-party app developers, smart device brands, and manufacturers to the company's OCR capabilities; and Youdao Sports, a sports-centric educational system. Its products and services include NetEase Cloud Music, a music streaming platform; Yanxuan, an e-commerce platform, which sells private label products; www.163.com portal and related mobile app, Wangyi Xinwen, which deliver information such as news, sports events, technology, fashion trends, and online entertainment; NetEase Mail, an email service; NetEase CC Live streaming, a live streaming platform with a focus on game broadcasting; and NetEase Pay, a payment platform. The company was formerly known as NetEase.com, Inc. and changed its name to NetEase, Inc. in March 2012. NetEase, Inc. was founded in 1997 and is headquartered in Hangzhou, the People's Republic of China.

How the Company Makes Money

NetEase generates revenue primarily through its online gaming segment, which includes both PC and mobile games. The company earns money from game sales, in-game purchases, subscriptions, and virtual goods. Additionally, NetEase has a growing e-commerce business that contributes to its revenue through the sale of products ranging from cosmetics to groceries. Advertising services also provide a significant revenue stream, with brands utilizing NetEase's platforms to reach a large audience. Furthermore, educational services and other digital content offerings, including music streaming, add to the company's diversified revenue model. Strategic partnerships, such as those with international game developers, enhance its gaming library and market presence, while investments in new technology and content innovation support ongoing growth.

NetEase Financial Statement Overview

Summary

NetEase exhibits a strong financial profile with consistent revenue growth, high profitability margins, and a solid balance sheet with low leverage. The company's ability to generate substantial cash flow further enhances its financial stability and capacity for growth.

Income Statement

NetEase demonstrates strong financial performance with consistent revenue growth and robust profitability. The TTM gross profit margin of 63.17% and net profit margin of 31.19% indicate efficient cost management and strong earnings capacity. The EBIT and EBITDA margins are also impressive at 31.43% and 33.37%, respectively, reflecting operational efficiency. Revenue growth has been steady, with a slight increase in the TTM period, showcasing resilience in a competitive industry.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.075, indicating minimal leverage and financial risk. The return on equity is strong at 24.25%, demonstrating effective use of shareholder funds to generate profits. The equity ratio of 72.86% highlights a strong capital structure, providing stability and flexibility for future growth.

Cash Flow

NetEase's cash flow performance is robust, with a significant free cash flow growth rate of 5.63% in the TTM period. The operating cash flow to net income ratio of 0.92 and free cash flow to net income ratio of 0.95 indicate strong cash generation relative to earnings, supporting ongoing investments and shareholder returns. The company maintains healthy cash flow coverage, ensuring liquidity and operational sustainability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	111.83B	105.30B	103.47B	96.50B	87.61B	73.67B
Gross Profit	70.98B	65.81B	63.06B	52.77B	46.97B	38.98B
EBITDA	37.56B	32.00B	30.76B	22.49B	19.69B	18.00B
Net Income	36.28B	29.70B	29.42B	20.34B	16.86B	12.06B
Balance Sheet
Total Assets	214.49B	195.99B	185.92B	172.76B	153.64B	141.87B
Cash, Cash Equivalents and Short-Term Investments	149.09B	137.58B	126.72B	117.46B	97.53B	93.47B
Total Debt	7.35B	12.82B	20.48B	28.46B	21.69B	20.31B
Total Liabilities	53.56B	53.50B	57.84B	63.89B	54.37B	48.08B
Stockholders Equity	156.26B	138.69B	124.29B	104.73B	95.33B	82.13B
Cash Flow
Free Cash Flow	46.89B	37.47B	31.06B	25.07B	21.82B	21.60B
Operating Cash Flow	48.93B	39.68B	35.33B	27.71B	24.93B	24.89B
Investing Cash Flow	-12.94B	17.92B	-17.04B	-7.37B	-7.08B	-29.19B
Financing Cash Flow	-19.09B	-27.34B	-21.47B	-10.24B	-12.59B	9.91B

NetEase Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 145.78
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTES, the sentiment is Positive. The current price of 145.78 is above the 20-day moving average (MA) of 139.78, above the 50-day MA of 139.02, and above the 200-day MA of 130.81, indicating a bullish trend. The MACD of 1.25 indicates Negative momentum. The RSI at 58.15 is Neutral, neither overbought nor oversold. The STOCH value of 42.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NTES.

NetEase Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTES	81 Outperform	$87.85B	18.26	24.65%	2.19%	5.69%	32.87%
PLTK	66 Neutral	$1.36B	15.87	―	9.98%	7.49%	-60.32%
EA	66 Neutral	$51.08B	59.72	13.20%	0.37%	-1.45%	-11.99%
BILI	62 Neutral	$12.68B	122.42	5.30%	―	16.84%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
TTWO	53 Neutral	$46.33B	―	-86.61%	―	13.98%	-6.71%
RBLX	51 Neutral	$53.85B	-59.49	-324.24%	―	32.70%	12.57%
BKSY	49 Neutral	$957.76M	-8.19	-88.03%	―	-5.13%	-37.34%

NetEase Corporate Events

NetEase Announces Retirement of Long-Serving Games Executive and Leadership Change in Core Entertainment Unit

On December 26, 2025, NetEase, Inc., the Chinese internet and gaming company listed on Nasdaq and the Hong Kong Stock Exchange, announced that Yingfeng Ding will retire as Executive Vice President and head of the Interactive Entertainment Group, part of its core online games division, effective December 31, 2025, after a 23-year tenure in which he played a key role in building the group’s flagship titles and R&D and operational capabilities. The company emphasized Ding’s pivotal contribution to its gaming success and noted that he will remain as a consultant through 2026, a move that suggests continuity in strategic and product development during a sensitive leadership transition in one of NetEase’s most critical business units.

The most recent analyst rating on (NTES) stock is a Buy with a $161.00 price target. To see the full list of analyst forecasts on NetEase stock, see the NTES Stock Forecast page.