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NetEase (NTES) Gains As Market Dips: What You Should Know

·3-min read

NetEase (NTES) closed at $89.46 in the latest trading session, marking a +0.54% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.12%. Elsewhere, the Dow gained 0.09%, while the tech-heavy Nasdaq added 0.41%.

Prior to today's trading, shares of the internet technology company had lost 2.19% over the past month. This has lagged the Computer and Technology sector's gain of 10.34% and the S&P 500's gain of 8.25% in that time.

Investors will be hoping for strength from NetEase as it approaches its next earnings release, which is expected to be August 18, 2022. In that report, analysts expect NetEase to post earnings of $1.10 per share. This would mark year-over-year growth of 35.8%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.44 billion, up 8.14% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $4.60 per share and revenue of $14.56 billion, which would represent changes of +17.05% and +7.22%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for NetEase. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 2.83% lower. NetEase is currently sporting a Zacks Rank of #4 (Sell).

Looking at its valuation, NetEase is holding a Forward P/E ratio of 19.36. This represents a discount compared to its industry's average Forward P/E of 19.52.

Also, we should mention that NTES has a PEG ratio of 1.32. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Internet - Software and Services stocks are, on average, holding a PEG ratio of 1.02 based on yesterday's closing prices.

The Internet - Software and Services industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 102, putting it in the top 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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