We’ve recently updated our valuation analysis.

NetEase Valuation

Is NTES undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NTES?

Other financial metrics that can be useful for relative valuation.

NTES key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue2.9x
Enterprise Value/EBITDA12.2x
PEG Ratio1.7x

Price to Earnings Ratio vs Peers

How does NTES's PE Ratio compare to its peers?

NTES PE Ratio vs Peers
The above table shows the PE ratio for NTES vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average48.6x
ATVI Activision Blizzard
31.4x14.5%US$59.0b
EA Electronic Arts
36.7x16.2%US$32.9b
TTWO Take-Two Interactive Software
117.7x61.6%US$19.0b
PLTK Playtika Holding
13.6x16.0%US$4.1b
NTES NetEase
19.4x11.4%US$48.4b

Price-To-Earnings vs Peers: NTES is good value based on its Price-To-Earnings Ratio (19.4x) compared to the peer average (49.9x).


Price to Earnings Ratio vs Industry

How does NTES's PE Ratio compare vs other companies in the US Entertainment Industry?

Price-To-Earnings vs Industry: NTES is good value based on its Price-To-Earnings Ratio (19.4x) compared to the US Entertainment industry average (21.2x)


Price to Earnings Ratio vs Fair Ratio

What is NTES's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NTES PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio19.4x
Fair PE Ratio28.1x

Price-To-Earnings vs Fair Ratio: NTES is good value based on its Price-To-Earnings Ratio (19.4x) compared to the estimated Fair Price-To-Earnings Ratio (28.1x).


Share Price vs Fair Value

What is the Fair Price of NTES when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NTES ($78.05) is trading below our estimate of fair value ($187.88)

Significantly Below Fair Value: NTES is trading below fair value by more than 20%.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


Discover undervalued companies