For NetEase Inc. [NTES], Analyst sees a drop to $90. What next?

NetEase Inc. [NASDAQ: NTES] plunged by -$2.35 during the normal trading session on Thursday and reaching a high of $67.26 during the day while it closed the day at $64.69. The company report on August 31, 2022 that NetEase Acquires Leading French Game Developer & Publisher Quantic Dream.

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Quantic Dream joins NetEase Games and will continue to bring high-quality AAA video game experiences to players worldwide.

NetEase, Inc. (NASDAQ: NTES, HKEX: 9999), one of China’s leading internet and online game services providers, today announced that its games division, NetEase Games, has acquired Quantic Dream S.A., one of the premier independent video game developers in the world. Quantic Dream, led by David Cage and Guillaume de Fondaumière, will become NetEase Games’ first studio in Europe, representing an important step in fulfilling NetEase’s vision to support innovation and game development around the globe. Quantic Dream will continue to operate independently, focusing on creating and publishing its video games on all platforms, as well as supporting and publishing third-party developed titles, while at the same time leveraging NetEase’s significant game development capabilities.

NetEase Inc. stock has also loss -9.10% of its value over the past 7 days. However, NTES stock has declined by -31.94% in the 3 months of the year. Over the past six months meanwhile, it has lost -24.52% and lost -36.44% year-on date.

The market cap for NTES stock reached $44.08 billion, with 654.94 million shares outstanding and 647.93 million shares in the current float. Compared to the average trading volume of 1.47M shares, NTES reached a trading volume of 3483891 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here’s what leading stock market gurus have to say about NetEase Inc. [NTES]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for NTES shares is $122.15 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on NTES stock is a recommendation set at 2.00. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

JP Morgan have made an estimate for NetEase Inc. shares, keeping their opinion on the stock as Neutral, with their previous recommendation back on September 07, 2022. While these analysts kept the previous recommendation, Macquarie raised their target price to Outperform. The new note on the price target was released on July 05, 2022, representing the official price target for NetEase Inc. stock. Previously, the target price had yet another raise from $60 to $120, while JP Morgan kept a Overweight rating on NTES stock.

The Average True Range (ATR) for NetEase Inc. is set at 3.03, with the Price to Sales ratio for NTES stock in the period of the last 12 months amounting to 3.39. The Price to Book ratio for the last quarter was 3.01, with the Price to Cash per share for the same quarter was set at 22.83. Price to Free Cash Flow for NTES in the course of the last twelve months was 16.83 with Quick ratio for the last quarter at 2.20.

NTES stock trade performance evaluation

NetEase Inc. [NTES] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -9.10. With this latest performance, NTES shares dropped by -18.89% in over the last four-week period, additionally sinking by -24.52% over the last 6 months – not to mention a drop of -36.18% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for NTES stock in for the last two-week period is set at 24.03, with the RSI for the last a single of trading hit 20.58, and the three-weeks RSI is set at 27.47 for NetEase Inc. [NTES]. The present Moving Average for the last 50 days of trading for this stock 82.08, while it was recorded at 68.44 for the last single week of trading, and 91.32 for the last 200 days.

NetEase Inc. [NTES]: An insightful look at the core fundamentals

Operating Margin for any stock indicates how profitable investing would be, and NetEase Inc. [NTES] shares currently have an operating margin of +18.74 and a Gross Margin at +53.62. NetEase Inc.’s Net Margin is presently recorded at +19.24.

Return on Total Capital for NTES is now 13.96, given the latest momentum, and Return on Invested Capital for the company is 18.72. Return on Equity for this stock inclined to 18.99, with Return on Assets sitting at 11.41. When it comes to the capital structure of this company, NetEase Inc. [NTES] has a Total Debt to Total Equity ratio set at 22.76. Additionally, NTES Total Debt to Total Capital is recorded at 18.54, with Total Debt to Total Assets ending up at 14.12. Long-Term Debt to Equity for the company is recorded at 2.11, with the Long-Term Debt to Total Capital now at 1.72.

Reflecting on the efficiency of the workforce at the company, NetEase Inc. [NTES] managed to generate an average of $633,609 per employee. Receivables Turnover for the company is 12.67 with a Total Asset Turnover recorded at a value of 0.59.NetEase Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 2.20 and a Current Ratio set at 2.20.

Earnings per share (EPS) analysis for NetEase Inc. [NTES] stock

The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for NTES. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for NetEase Inc. go to 9.59%.

NetEase Inc. [NTES]: Insider Ownership positions

There are presently around $6,232 million, or 17.40% of NTES stock, in the hands of institutional investors. The top three institutional holders of NTES stocks are: INVESCO LTD. with ownership of 14,699,478, which is approximately -9.211% of the company’s market cap and around 45.00% of the total institutional ownership; UBS ASSET MANAGEMENT AMERICAS INC, holding 8,343,599 shares of the stock with an approximate value of $539.75 million in NTES stocks shares; and DODGE & COX, currently with $426.39 million in NTES stock with ownership of nearly -0.495% of the company’s market capitalization.

Positions in NetEase Inc. stocks held by institutional investors increased at the end of November and at the time of the November reporting period, where 134 institutional holders increased their position in NetEase Inc. [NASDAQ:NTES] by around 6,533,842 shares. Additionally, 224 investors decreased positions by around 28,625,284 shares, while 60 investors held positions by with 61,183,244 shares. The mentioned changes placed institutional holdings at 96,342,370 shares, according to the latest SEC report filing. NTES stock had 38 new institutional investments in for a total of 1,715,236 shares, while 65 institutional investors sold positions of 6,140,376 shares during the same period.


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