NTES Valuation

NetEase Inc

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131.675

+2.455(1.900%)1D

Overview
Forecast
Valuation
Earnings

NTES Relative Valuation

NTES's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, NTES is overvalued; if below, it's undervalued.

Historical Valuation

NetEase Inc (NTES) is now in the Undervalued zone, suggesting that its current forward PE ratio of 14.95 is considered Undervalued compared with the five-year average of 16.25. The fair price of NetEase Inc (NTES) is between 196.69 to 279.54 according to relative valuation methord. Compared to the current price of 129.22 USD , NetEase Inc is Undervalued By 34.3%.

Relative Value

Fair Zone

196.69-279.54

Current Price：129.22

34.3%

Undervalued

14.95

Trailing

Forward

11.06

EV/EBITDA

NetEase Inc. (NTES) has a current EV/EBITDA of 11.06. The 5-year average EV/EBITDA is 13.28. The thresholds are as follows: Strongly Undervalued below 4.65, Undervalued between 4.65 and 8.96, Fairly Valued between 17.60 and 8.96, Overvalued between 17.60 and 21.91, and Strongly Overvalued above 21.91. The current Forward EV/EBITDA of 11.06 falls within the Historic Trend Line -Fairly Valued range.

11.67

EV/EBIT

NetEase Inc. (NTES) has a current EV/EBIT of 11.67. The 5-year average EV/EBIT is 15.01. The thresholds are as follows: Strongly Undervalued below 3.36, Undervalued between 3.36 and 9.18, Fairly Valued between 20.83 and 9.18, Overvalued between 20.83 and 26.65, and Strongly Overvalued above 26.65. The current Forward EV/EBIT of 11.67 falls within the Historic Trend Line -Fairly Valued range.

4.93

NetEase Inc. (NTES) has a current PS of 4.93. The 5-year average PS is 4.20. The thresholds are as follows: Strongly Undervalued below 2.69, Undervalued between 2.69 and 3.45, Fairly Valued between 4.96 and 3.45, Overvalued between 4.96 and 5.72, and Strongly Overvalued above 5.72. The current Forward PS of 4.93 falls within the Historic Trend Line -Fairly Valued range.

13.73

P/OCF

NetEase Inc. (NTES) has a current P/OCF of 13.73. The 5-year average P/OCF is 15.04. The thresholds are as follows: Strongly Undervalued below 7.61, Undervalued between 7.61 and 11.32, Fairly Valued between 18.75 and 11.32, Overvalued between 18.75 and 22.46, and Strongly Overvalued above 22.46. The current Forward P/OCF of 13.73 falls within the Historic Trend Line -Fairly Valued range.

14.22

P/FCF

NetEase Inc. (NTES) has a current P/FCF of 14.22. The 5-year average P/FCF is 16.88. The thresholds are as follows: Strongly Undervalued below 8.03, Undervalued between 8.03 and 12.45, Fairly Valued between 21.30 and 12.45, Overvalued between 21.30 and 25.72, and Strongly Overvalued above 25.72. The current Forward P/FCF of 14.22 falls within the Historic Trend Line -Fairly Valued range.

NetEase Inc (NTES) has a current Price-to-Book (P/B) ratio of 3.92. Compared to its 3-year average P/B ratio of 2.32 , the current P/B ratio is approximately 68.95% higher. Relative to its 5-year average P/B ratio of 1.77, the current P/B ratio is about 120.80% higher. NetEase Inc (NTES) has a Forward Free Cash Flow (FCF) yield of approximately 7.77%. Compared to its 3-year average FCF yield of 7.58%, the current FCF yield is approximately 2.48% lower. Relative to its 5-year average FCF yield of 6.69% , the current FCF yield is about 16.21% lower.

3.92

P/B

Median3y

2.32

Median5y

1.77

7.77

FCF Yield

Median3y

7.58

Median5y

6.69

Competitors Valuation Multiple

The average P/S ratio for NTES's competitors is 20.79, providing a benchmark for relative valuation. NetEase Inc Corp (NTES) exhibits a P/S ratio of 4.93, which is -76.27% above the industry average. Given its robust revenue growth of 9.58%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

Palantir Technologies Inc

Performance Decomposition

Market capitalization of NTES increased by 60.64% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 13.34 to 17.26.

The secondary factor is the Margin Expansion, contributed 21.61%to the performance.

Overall, the performance of NTES in the past 1 year is driven by P/E Change. Which is more unsustainable.

9.58%

3.52B → 3.86B

Revenue Growth

21.61%

26.79 → 32.58

Margin Expansion

29.45%

13.34 → 17.26

P/E Change

60.64%