Question 1

What is NetEase Inc (NTES)?

Accepted Answer

NetEase Inc is a company principally engaged in the gaming business. The Company operates through four segments. Games and Related Value-Added Services segment is engaged in the development and sale of mobile games, game operations, and other value-added services, including in-game virtual items and prepaid credits. Youdao segment provides learning services, smart devices, and online marketing services. The segment's products and services include online courses and digital content services. NetEase Cloud Music segment provides online music services, social entertainment services, and other services through the sale of membership subscriptions for various content and service packages, primarily through the sale of virtual items. Innovative Businesses and Others segment provides rigorous selection, advertising services, email, and other value-added services. It operates in the Technology sector (PREPACKAGED SOFTWARE industry).

NetEase Inc is a good buy right now due to its strong revenue growth of 7.9% year-over-year in Q2 2026, alongside a robust gross margin of 70.47%. The current price of $122.76 is significantly below analyst targets, with BofA's target at $174, indicating a potential upside of 42%. However, a risk to consider is the recent earnings miss, with reported EPS of 1.60 against an estimate of 2.20, leading to a 5.85% drop in price post-earnings.

29 analysts cover NTES: 19 rate it Buy, 8 Hold and 2 Sell. The average price target is 157.33.

Question 2

Should I buy NTES?

Accepted Answer

NetEase Inc is a good buy right now due to its strong revenue growth of 7.9% year-over-year in Q2 2026, alongside a robust gross margin of 70.47%. The current price of $122.76 is significantly below analyst targets, with BofA's target at $174, indicating a potential upside of 42%. However, a risk to consider is the recent earnings miss, with reported EPS of 1.60 against an estimate of 2.20, leading to a 5.85% drop in price post-earnings.