NTES Should I Buy
-
$
0.000
0.000(0.000%)
At close0.000(0.000%)Aft-market
ET
NetEase Inc (NTES) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has positive catalysts such as the reduction in App Store commission and hedge fund buying activity, the financial performance in the latest quarter shows a decline in net income and EPS, which raises concerns about profitability. Additionally, technical indicators are neutral, and there are no strong proprietary trading signals to suggest an immediate entry point. A hold is recommended until clearer bullish signals or stronger financial growth trends emerge.
The MACD is positive at 0.706, indicating a mild bullish trend, but it is contracting. RSI is neutral at 42.724, showing no clear overbought or oversold conditions. Moving averages are converging, suggesting a lack of strong directional momentum. The stock is trading near its pivot level of 117.331, with support at 115.311 and resistance at 119.352.
Apple’s reduction of App Store commission in China is expected to benefit NetEase and the broader entertainment sector.
Hedge fund buying activity has increased by 133.24% over the last quarter, indicating institutional confidence.
The latest quarter financials show a significant drop in net income (-27.80% YoY) and EPS (-28.95% YoY), which could weigh on long-term profitability.
Analyst sentiment is mixed, with Barclays lowering its price target to $132, though Citi remains bullish with a raised target of $165.
In Q4 2025, NetEase reported a 4.42% YoY increase in revenue to $3.89 billion. However, net income dropped by 27.80% YoY to $880.42 million, and EPS fell by 28.95% YoY to $0.27. Gross margin improved to 64.23%, up 5.57% YoY, indicating operational efficiency despite declining profitability.
Analyst sentiment is mixed. Citi remains bullish, raising the price target to $165, citing resilience in the game portfolio and AI integration. Barclays, however, lowered its price target to $132, maintaining an Equal Weight rating.
