Head-To-Head Contrast: NetEase (NASDAQ:NTES) vs. Its Competitors

NetEase (NASDAQ: NTES) is one of 183 public companies in the “IT Services & Consulting” industry, but how does it weigh in compared to its peers? We will compare NetEase to related companies based on the strength of its risk, profitability, earnings, dividends, analyst recommendations, valuation and institutional ownership.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
NetEase	25.34%	31.84%	21.48%
NetEase Competitors	-16.75%	-272.90%	-4.17%

Analyst Ratings

This is a breakdown of recent ratings and target prices for NetEase and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NetEase	3	4	8	0	2.33
NetEase Competitors	732	4647	7420	166	2.54

NetEase presently has a consensus target price of $322.77, indicating a potential upside of 0.39%. As a group, “IT Services & Consulting” companies have a potential upside of 2.88%. Given NetEase’s peers stronger consensus rating and higher probable upside, analysts plainly believe NetEase has less favorable growth aspects than its peers.

Earnings & Valuation

This table compares NetEase and its peers top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
NetEase	$5.50 billion	$1.67 billion	22.22
NetEase Competitors	$2.79 billion	$289.83 million	335.11

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

Institutional and Insider Ownership

50.5% of NetEase shares are held by institutional investors. Comparatively, 61.4% of shares of all “IT Services & Consulting” companies are held by institutional investors. 54.7% of NetEase shares are held by company insiders. Comparatively, 17.0% of shares of all “IT Services & Consulting” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Dividends

NetEase pays an annual dividend of $3.63 per share and has a dividend yield of 1.1%. 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 1.6% and pay out 40.2% of their earnings in the form of a dividend.

Volatility & Risk

NetEase has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, NetEase’s peers have a beta of 1.14, meaning that their average share price is 14% more volatile than the S&P 500.

Summary

NetEase peers 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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