Should You Buy NetEase Inc (NTES) Now?
Let's talk about the popular NetEase Inc (NASDAQ:NTES). The company's shares saw significant share price volatility over the past couple of months on the NasdaqGS, rising to the highs of $333.56 and falling to the lows of $265.15. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether NTES's current trading price of $268.5 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at NTES’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. View our latest analysis for NetEase
What is NTES worth?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 19% above my intrinsic value, which means if you buy NTES today, you’d be paying a relatively fair price for it. And if you believe that NTES is really worth $217.25, there’s only an insignificant downside when the price falls to its real value. In addition to this, it seems like NTES’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued. This is because NTES’s stock is less volatile than the wider market given its low beta.
Can we expect growth from NTES?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio.Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at NTES future expectations. NTES’s earnings over the next few years are expected to increase by 47.78%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in NTES’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at NTES? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on NTES, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for NTES, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on NetEase. You can find everything you need to know about NTES in the latest infographic research report. If you are no longer interested in NetEase, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
