New Lifetime High Today: NetEase (NTES)

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.

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 $95.3 million.
  • NTES has traded 20,540 shares today.
  • NTES is trading at a new lifetime high.

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More details on NTES:

NetEase, Inc., through its subsidiaries, operates an interactive online community 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 1.1%. NTES has a PE ratio of 22. Currently there are 5 analysts that rate NetEase a buy, no analysts rate it a sell, and none rate it a hold.

The average volume for NetEase has been 562,300 shares per day over the past 30 days. NetEase has a market cap of $16.8 billion and is part of the technology sector and internet industry. Shares are up 30% year-to-date as of the close of trading on Tuesday.

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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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, attractive valuation levels and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 5.9%. Since the same quarter one year prior, revenues rose by 34.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Although NTES's debt-to-equity ratio of 0.09 is very low, it is currently higher than that of the industry average. Along with this, the company maintains a quick ratio of 3.86, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to its closing price of one year ago, NTES's share price has jumped by 90.09%, exceeding the performance of the broader market during that same time frame. 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.
  • The gross profit margin for NETEASE INC is currently very high, coming in at 73.65%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 36.71% significantly outperformed against the industry average.

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