NetEase (NTES)
NASDAQ:NTES
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NetEase
(NASDAQ:NTES)
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Rating:74Outperform
Price Target:
$132.00
▲(16.56% Upside)
Action:ReiteratedDate:02/14/26
NTES scores well on financial strength and cash generation, supported by a conservative balance sheet and positive earnings-call outlook/capital returns. The overall score is held back primarily by weak technical momentum (downtrend and negative MACD) and the risk of slowing top-line growth.
Positive Factors
Very strong balance sheet
A materially de‑risked balance sheet with sharply lower debt and rising equity gives NetEase lasting financial flexibility. Low leverage supports capital returns, M&A optionality, and resilience through gaming cycles, reducing refinancing and solvency risk over the next several quarters.
Negative Factors
Slowing top-line growth
A deceleration from strong prior growth to flat/declining revenue signals maturing core markets and tougher user acquisition dynamics. If persistent, slower top‑line growth constrains long‑term EPS expansion and increases pressure on management to offset with cost cuts or portfolio diversification.
Read all positive and negative factors
Positive Factors
Negative Factors
Very strong balance sheet
A materially de‑risked balance sheet with sharply lower debt and rising equity gives NetEase lasting financial flexibility. Low leverage supports capital returns, M&A optionality, and resilience through gaming cycles, reducing refinancing and solvency risk over the next several quarters.
Read all positive factors
NetEase (NTES) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$69.36B
Dividend Yield2.19%
Average Volume (3M)825.64K
Price to Earnings (P/E)18.2
Beta (1Y)0.54
Revenue Growth5.69%
EPS Growth32.87%
CountryUS
Employees26,028
SectorCommunication Services
Sector Strength97
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)1.60
Shares Outstanding633,591,800
10 Day Avg. Volume440,853
30 Day Avg. Volume825,645
Financial Highlights & Ratios
PEG Ratio1.30
Price to Book (P/B)3.83
Price to Sales (P/S)5.45
P/FCF Ratio12.71
Enterprise Value/Market Cap6.45
Enterprise Value/Revenue3.97
Enterprise Value/Gross Profit6.18
Enterprise Value/Ebitda11.75
Forecast
1Y Price Target
$163.08Price Target Upside44.00% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)62.72
Revenue Forecast (FY)$120.33B
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...
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-com...
NetEase Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows how much each business unit contributes to total sales, providing insight into diversification, growth areas, and potential vulnerabilities in revenue streams.
Shows how much each business unit contributes to total sales, providing insight into diversification, growth areas, and potential vulnerabilities in revenue streams.
Data provided by:
The Fly
The FlyNetEase Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 26, 2026
Earnings Call Sentiment Positive
The call communicated a generally positive outlook driven by solid full-year revenue growth (+7% YoY), strong performance and record results from core gaming franchises, successful global launches (Where Winds Meet, Marvel Rivals) and deep, production-level AI integration that management positions as a long-term competitive advantage. Offsetting these positives were meaningful near-term profitability pressures in the quarter (non-GAAP net income down 27% YoY), a small decline in Cloud Music full-year revenue (-2% YoY), and some segment-level margin and YoY revenue weakness in innovative businesses and social entertainment. The company maintains a strong cash position, active capital return (dividend and buybacks), and a robust pipeline of global titles and AI-driven initiatives, suggesting the positives materially outweigh the quarter-specific setbacks.Positive Updates
Total Net Revenue Growth
Total net revenues for 2025 were RMB 112.6 billion (USD 16.1 billion), representing a 7% year-over-year increase, with Q4 revenues of RMB 27.5 billion (USD 3.9 billion).
Negative Updates
Quarterly Earnings Decline
Non-GAAP net income attributable to shareholders for Q4 fell to RMB 7.1 billion (USD ~1 billion), down 27% year-over-year; non-GAAP basic earnings per ADS for the quarter were USD 1.58 (decline vs. prior-year period).
Read all updates
Q4-2025 Updates
Positive
Negative
Total Net Revenue Growth
Total net revenues for 2025 were RMB 112.6 billion (USD 16.1 billion), representing a 7% year-over-year increase, with Q4 revenues of RMB 27.5 billion (USD 3.9 billion).
Read all positive updates
Company Guidance
Management guided to a Q3 launch for Sea of Remnants with a simultaneous cross‑platform global rollout, said Auto Chess titles in testing are targeted for simultaneous PC/mobile/console launches, and reiterated continued high‑intensity AI and R&D investment (R&D ~15.7% of 2025 revenue; 16.1% in Q4). They also highlighted FY2025 net revenue of RMB112.6 billion (+7% YoY, USD16.1B) with games & VAS RMB92.1B (+10%) and online games RMB89.6B (+11%); Q4 revenue RMB27.5B (USD3.9B) with games RMB22.0B and online games RMB21.3B (+4% YoY). Other 2025 metrics: Youdao RMB5.9B (+~5%; Q4 RMB1.6B, +17%), NetEase Cloud Music RMB7.8B (‑2%; Q4 RMB2.0B, +5%), innovative business RMB6.8B (Q4 RMB2.0B, ‑10% YoY, +42% QoQ). Profitability and capital return guidance included FY gross margin 64.3% (Q4 64.2%), non‑GAAP net income FY RMB37.3B (+11%) and Q4 RMB7.1B (‑27% YoY) with non‑GAAP EPS FY USD8.38 per ADS (Q4 USD1.58 per ADS), Q4 operating expenses RMB9.4B (34% of revenues) with S&M 14.1% (13% FY), effective tax rate FY 14.8% (Q4 16.4%), net cash ~RMB163.5B (vs RMB131.5B year‑end 2024), a dividend of USD0.232 per share / USD1.16 per ADS, and ~22.1M ADS repurchased (~USD2B) under a USD5B buyback program.NetEase Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
84
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 112.63B | 105.30B | 103.47B | 96.50B | 87.61B |
| Gross Profit | 72.40B | 65.81B | 63.06B | 52.77B | 46.97B |
| EBITDA | 38.07B | 32.00B | 30.76B | 22.49B | 19.69B |
| Net Income | 33.76B | 29.70B | 29.42B | 20.34B | 16.86B |
Balance Sheet | |||||
| Total Assets | 221.56B | 195.99B | 185.92B | 172.76B | 153.64B |
| Cash, Cash Equivalents and Short-Term Investments | 167.04B | 137.58B | 126.72B | 117.46B | 97.53B |
| Total Debt | 6.39B | 12.82B | 20.48B | 28.46B | 21.69B |
| Total Liabilities | 56.35B | 53.50B | 57.84B | 63.89B | 54.37B |
| Stockholders Equity | 160.40B | 138.69B | 124.29B | 104.73B | 95.33B |
Cash Flow | |||||
| Free Cash Flow | 48.32B | 37.47B | 31.06B | 25.07B | 21.82B |
| Operating Cash Flow | 49.36B | 39.68B | 35.33B | 27.71B | 24.93B |
| Investing Cash Flow | -32.18B | 17.92B | -17.04B | -7.37B | -7.08B |
| Financing Cash Flow | -19.71B | -27.34B | -21.47B | -10.24B | -12.59B |
NetEase Technical Analysis
Negative
113.25
Price Trends
116.94
Negative
126.89
Negative
132.37
Negative
Market Momentum
-1.38
Negative
45.95
Neutral
75.51
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTES, the sentiment is Negative. The current price of 113.25 is below the 20-day moving average (MA) of 113.73, below the 50-day MA of 116.94, and below the 200-day MA of 132.37, indicating a bearish trend. The MACD of -1.38 indicates Negative momentum. The RSI at 45.95 is Neutral, neither overbought nor oversold. The STOCH value of 75.51 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NTES.
NetEase Risk Analysis
NetEase disclosed 94 risk factors in its most recent earnings report. NetEase reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
NetEase Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $69.36B | 18.20 | 22.14% | 2.19% | 5.69% | 32.87% | |
70 Outperform | $50.60B | 145.12 | 11.05% | 0.37% | -1.45% | -11.99% | |
65 Neutral | $9.92B | 62.04 | 8.04% | ― | 16.84% | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
58 Neutral | $1.21B | -193.07 | -77.78% | ― | -5.13% | -37.34% | |
57 Neutral | $36.67B | -126.36 | -126.41% | ― | 13.98% | -6.71% | |
52 Neutral | $39.10B | -52.47 | -290.61% | ― | 32.70% | 12.57% | |
50 Neutral | $1.21B | -7.20 | 119.44% | 9.98% | 7.49% | -60.32% |
* Communication Services Sector Average
NTES
NetEase
113.25
16.22
16.71%
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NetEase Corporate Events
NetEase Announces Retirement of Long-Serving Games Executive and Leadership Change in Core Entertainment Unit
Dec 29, 2025
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, p...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.