NetEase (NASDAQ: NTES) is one of 187 public companies in the “IT Services & Consulting” industry, but how does it compare to its competitors? We will compare NetEase to similar businesses based on the strength of its earnings, valuation, profitability, risk, analyst recommendations, institutional ownership and dividends.

Dividends

NetEase pays an annual dividend of $3.69 per share and has a dividend yield of 1.2%. NetEase pays out 25.1% of its earnings in the form of a dividend. As a group, “IT Services & Consulting” companies pay a dividend yield of 1.7% and pay out 38.2% of their earnings in the form of a dividend.

Insider and Institutional Ownership

50.3% of NetEase shares are owned by institutional investors. Comparatively, 63.0% of shares of all “IT Services & Consulting” companies are owned by institutional investors. 54.7% of NetEase shares are owned by insiders. Comparatively, 15.9% of shares of all “IT Services & Consulting” companies are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares NetEase and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NetEase 27.54% 34.52% 23.42%
NetEase Competitors -14.10% -252.35% -2.64%

Valuation and Earnings

This table compares NetEase and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
NetEase $5.50 billion $1.67 billion 20.28
NetEase Competitors $2.79 billion $290.83 million 706.40

NetEase has higher revenue and earnings than its competitors. NetEase is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for NetEase and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NetEase 3 5 5 0 2.15
NetEase Competitors 722 4626 7375 166 2.54

NetEase currently has a consensus target price of $297.40, indicating a potential downside of 0.39%. As a group, “IT Services & Consulting” companies have a potential upside of 5.61%. Given NetEase’s competitors stronger consensus rating and higher possible upside, analysts plainly believe NetEase has less favorable growth aspects than its competitors.

Risk & Volatility

NetEase has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, NetEase’s competitors have a beta of 1.12, meaning that their average share price is 12% more volatile than the S&P 500.

Summary

NetEase competitors beat NetEase on 8 of the 15 factors compared.

About NetEase

NetEase, Inc. (NetEase) is a technology company. The Company operates an interactive online community in China and is a provider of Chinese language content and services through its online games, Internet media, e-mail, e-commerce and other businesses. The Company operates through three segments: Online Game Services; Advertising Services, and E-mail, E-commerce and Others. Its online games business primarily focuses on offering personal computer (PC)-client massively multi-player online role-playing games (PC-client MMORPGs), as well as mobile games to the Chinese market. The NetEase Websites provide Internet users with Chinese language online services centered over three core service categories, which include content, community and communication. Its online advertising offerings include banner advertising, direct e-mail, sponsored special events, games, contests and other activities. It offers free and fee-based premium e-mail services to its individual users and corporate users.

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