NetEase (NTES) Hits New Lifetime High Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified NetEase ( NTES) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified NetEase as such a stock due to the following factors:

  • NTES has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $51.1 million.
  • NTES has traded 9,506 shares today.
  • NTES is trading at a new lifetime high.

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More details on NTES:

NetEase, Inc., through its subsidiaries, operates in online games, Internet portal, and e-mail and wireless value-added services businesses in the People's Republic of China. The company operates in three segments: Online Game Services; Advertising Services; and E-mail, E-Commerce and Others. The stock currently has a dividend yield of 2.2%. NTES has a PE ratio of 21.1. Currently there are 5 analysts that rate NetEase a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for NetEase has been 401,300 shares per day over the past 30 days. NetEase has a market cap of $12.2 billion and is part of the technology sector and internet industry. Shares are up 20.8% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates NetEase as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 42.35% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, NTES should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • NETEASE INC has improved earnings per share by 7.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, NETEASE INC increased its bottom line by earning $5.63 versus $4.44 in the prior year. This year, the market expects an improvement in earnings ($36.86 versus $5.63).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Internet Software & Services industry average. The net income increased by 7.6% when compared to the same quarter one year prior, going from $180.48 million to $194.19 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 27.5%. Since the same quarter one year prior, revenues rose by 19.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Although NTES's debt-to-equity ratio of 0.10 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 4.01, which clearly demonstrates the ability to cover short-term cash needs.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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