QualityDipStocks / Technology · Software
NetEase NTES
On dip watch: 23% below its 52-week high.
A quality company trading well below our fair value estimate.
- Fair value est.
- $209.40+84%
- Market Value
- —
- Off 52-wk high
- −23%
- Risk vs market
- Lowbeta 0.45
5 bullish · 3 bearish See why
Key levels
Every level vs today’s $113.64
- 52-wk lowlowest close, 1 year$109.26−3.9%
- PriceFri Oct 30 close$113.64you are here
- 52-wk highhighest close, 1 year$147.56+29.8%
- Fair value est.base case$209.40+84.3%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 5.3% ±2 points. Bear = 10.5% and 3.3%; bull = 8.5% and 7.3% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price is below even the bear case.
What the price implies To be worth today’s price, NTES’s free cash flow would need to shrink about 5% a year for five years; our estimate uses 5%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much NTES moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Moves much less than the market, but its own price swings are 2.6× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- 0.45
- Volatility
- 33% vs 13% SPY
- Correlation SPY
- 0.17
- Correlation QQQ
- 0.15
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationOur DCF fair value estimate is $209.40, 84% above the price.
ValuationFree-cash-flow yield of 10.2% (price / FCF 9.8×): $7.5B of free cash in the last 12 months.
ValuationP/E of 14.4× vs a 33.9× median for the 138 Technology companies we cover.
ProfitabilityOperating margin widened to 31.8% in FY2025 from 26.8% in FY2023 (SEC filings).
QualityPasses all four of our quality checks: cash generation, returns on capital, growth and balance sheet.
Top bearish points 3 of 5
GrowthSales grew 7.0% over the last 12 months, below the 18% median for the 163 Technology companies we cover.
GrowthSales grew 5.3% a year over the last three fiscal years, below the 11% median for the 162 Technology companies we cover.
GrowthDiluted EPS grew 14% in the last fiscal year, below the 18% median for the 118 Technology companies we cover.
Who’s talking about it
Notable investors, executives, analysts and public figures on NetEase in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in Software
All fundamentals
P/E 14.4 · FCF yield 10.2% · ROE 23%
Valuation
- P/E
- 14.4×Technology median 33.9×
- Price / FCF
- 9.8×
- FCF yield
- 10.2%
- EV / EBITDA
- n/aD&A or debt not tagged in SEC data
- Price / sales
- 4.32×
- Price / book
- 3.03×
- Market cap
- $73.1Bprice × diluted shares
- Enterprise value
- n/anot reported in its SEC filings
Growth
- Revenue, 12 months
- $16.9B
- Sales growth, 12 months
- +7.0%vs the 12 months before
- Sales growth, 3 yrs
- +5.3%/yrfrom FY2022
- Diluted EPS, 12 months
- $10.48
- EPS growth, last FY
- +14.0%
- Net income, 12 months
- $5.1B
- Net income growth
- +14%12 months vs before
Profitability
- Gross margin
- 64.3%
- Operating margin
- 31.8%
- Net margin
- 30.0%
- FCF margin
- 44.1%
- Return on equity
- 23%
- Return on invested capital
- n/aoperating income, debt, equity or cash not tagged
Balance sheet
- Cash & short-term inv.
- $10.5B
- Total debt
- n/anot reported in its SEC filings
- Net cash
- n/acash or debt not tagged in SEC data
- Debt / equity
- n/adebt or equity not tagged in SEC data
- Interest coverage
- n/ainterest expense not tagged in SEC data
Cash flow & returns
- Free cash flow, 12 months
- $7.5B
- FCF growth, 12 months
- +29%
- Dividend yield
- 2.84%$2.1B paid
- Payout ratio
- 41%
- Buybacks, 12 months
- n/anot reported in its SEC filings
- Share count, 1 year
- n/ano quarterly diluted share count
- Stock-based comp
- $549M
Trailing 12 months to Dec 31, 2025; balance sheet at Dec 31, 2025. From NetEase’s SEC filings, reported in CNY and converted to US dollars. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $209.40 · FCF value $1,987
Assumes 5.3% growth for 5 years (revenue grew 5.3% a year FY22–FY25), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $11.61 a share (fiscal year to Dec 31, 2025, converted from CNY at 0.1505, 5 shares per ADR), from the 20-F filed Apr 15, 2026.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. We watch it daily for our three reversal signal rules while it sits in a dip.
Momentum & 52-week range
RSI 37 · 5 days −4.2%
The business
FCF $50.0B · Sales +8%
- Free cash flow, 12 months$50.0B
- Free-cash-flow yield69.9%
- Free-cash-flow margin43%
- Gross margin67%
- Operating margin35%
- Return on invested capital18%
- Return on equity20%
- Sales growth (latest quarter vs year-ago quarter)+8%
- Net debt / EBITDA−0.2×
Next report
Nov 19
- DateThu Nov 19
- Consensus EPS$2.40
- Year-ago EPS$1.88
- QuarterSep/2026
From Nasdaq’s earnings calendar. A report resets Market Value.
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
Get a text when NTES fires a reversal signal
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