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

Risk & Volatility

NetEase has a beta of 0.92, meaning that its share price is 8% less volatile than the S&P 500. Comparatively, NetEase’s rivals have a beta of 1.16, meaning that their average share price is 16% more volatile than the S&P 500.

Profitability

This table compares NetEase and its rivals’ 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 -20.17% -269.41% -4.59%

Analyst Ratings

This is a breakdown of recent ratings and price targets for NetEase and its rivals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NetEase 3 4 8 0 2.33
NetEase Competitors 731 4677 7443 169 2.54

NetEase presently has a consensus target price of $322.77, indicating a potential downside of 0.35%. As a group, “IT Services & Consulting” companies have a potential upside of 2.78%. Given NetEase’s rivals stronger consensus rating and higher possible upside, analysts plainly believe NetEase has less favorable growth aspects than its rivals.

Institutional & Insider Ownership

50.5% of NetEase shares are owned by institutional investors. Comparatively, 61.8% of shares of all “IT Services & Consulting” companies are owned by institutional investors. 54.7% of NetEase shares are owned by company insiders. Comparatively, 16.9% of shares of all “IT Services & Consulting” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

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 36.1% of their earnings in the form of a dividend.

Earnings and Valuation

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

Gross Revenue Net Income Price/Earnings Ratio
NetEase $5.50 billion $1.67 billion 22.38
NetEase Competitors $2.81 billion $293.37 million 360.20

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

Summary

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

NetEase Company Profile

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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