NetEase, Inc. Just Beat EPS By 26%: Here's What Analysts Think Will Happen Next

Shareholders of NetEase, Inc. (HKG:9999) will be pleased this week, given that the stock price is up 16% to HK$190 following its latest quarterly results. Revenues were CN¥29b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at CN¥3.21, an impressive 26% ahead of estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Taking into account the latest results, the most recent consensus for NetEase from 33 analysts is for revenues of CN¥114.9b in 2025. If met, it would imply an okay 7.2% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 6.7% to CN¥10.90. In the lead-up to this report, the analysts had been modelling revenues of CN¥113.7b and earnings per share (EPS) of CN¥9.82 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the solid gain to earnings per share expectations following these results.

View our latest analysis for NetEase

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.0% to HK$201. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on NetEase, with the most bullish analyst valuing it at HK$251 and the most bearish at HK$118 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 9.7% growth on an annualised basis. That is in line with its 10.0% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 8.5% annually. So although NetEase is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards NetEase following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple NetEase analysts - going out to 2027, and you can see them free on our platform here.

You can also see our analysis of NetEase's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.