242.71 -0.77 (-0.32%)
After hours: 4:11PM EDT
|Bid||243.08 x 800|
|Ask||243.05 x 900|
|Day's Range||239.57 - 244.08|
|52 Week Range||184.60 - 324.36|
|Beta (3Y Monthly)||0.37|
|PE Ratio (TTM)||36.51|
|Earnings Date||May 13, 2019 - May 17, 2019|
|Forward Dividend & Yield||1.92 (0.79%)|
|1y Target Est||283.01|
A base is an important concept in chart reading for growth investors. NetEase formed a pair of good ones in both 2015 and 2016
Despite momentum for tech stocks and an earnings beat, uncertainty in China's video game market helped make February a rocky month for the online media company.
The regulatory body instituted a moratorium early last year on game approvals based on concerns about the social impact of games on the Chinese population, especially children. Shares of Tencent, China's largest maker of online games, fell sharply last year when the regulatory body first suspended its approvals of new games. On Friday morning, shares of Tencent were down 2.4% to $43.40 while those of NetEase were rising 0.7% to $225.99.
China's content regulator on Friday said it has approved the monetization of 95 new video games, including titles from Tencent Holdings Ltd and NetEase Inc. The games include Tencent's Journey to Fairyland 2, a 3D online game, and two others from NetEase. China has approved 726 video games since December.
For U.S. gaming companies, China is a tantalizing opportunity that comes at a very high cost. As trade talks plod along, some game publishers have been opening up on how they're approaching the valuable market. "China, I think, as everyone would acknowledge, China is a very particular marketplace," EA CEO Andrew Wilson told investors on a Feb. 5 earnings call.
Diablo is one of a growing number of artists striking direct deals with Chinese streaming services, upending decades of record-industry orthodoxy. Musicians are supposed to sign with a record label because the company has offices and connections all over the world.
NetEase, China's second-biggest online games publisher with a growing ecommerce segment, is laying off a significant number of its employees, adding to a list of Chinese tech giants that have shed staff following the Lunar New Year. A NetEase employee who was recently let go confirmed with TechCrunch that the company had fired a large number of people spanning multiple departments, including ecommerce, education, agriculture (yes, founder and executive officer Ding Lei has a thing for organic farming) and public relations, although downsizing at Yanxuan, its ecommerce brand that sells private-label goods online and offline, had started before the Lunar New Year holiday.
Before Activision (NASDAQ:ATVI) reported its fourth-quarter earnings, Activision stock fell from about $85 in Oct. 2018 to as low as $40.Source: Shutterstock Electronic Arts Inc. (NASDAQ:EA) and Take-Two Interactive Software, Inc. (NASDAQ:TTWO) are not faring that much better, either, losing around one-third of their value from their 52-week highs. Why are gaming stocks out of favor and should value investors even consider Activision, especially when the company is forecasting weaker results going forward? * 9 High-Growth Stocks to Buy Now for Monster Returns Fourth-Quarter ResultsActivision generated record net revenue of $7.5 billion for the year. In Q4, the company's revenue was $2.38 billion, also setting a record.InvestorPlace - Stock Market News, Stock Advice & Trading TipsEA's 2018 EPS of $2.72 was also the highest ever and came in well above its 2017 EPS of $2.21 levels. But EA's 2018 operating cash flow was $1.79 billion, below last year's $2.21 billion.Markets glossed over the strong figures and focused instead on its weak booking numbers. Even though its bookings of $7.26 billion reached records levels, they were only slightly ahead of last year's $7.16 billion. With bookings growth clearly slowing, investors are unwilling to pay a premium for Activision stock.After Activision stock dropped 48% from its yearly highs, the shares trade at a more reasonable price-earnings ratio of 19. The Risk to Activision Stock Posed by Freemium Games Is OverstatedFortnite, which Epic Games published, is the hottest cross-platform game on the market. It is popular not only on mobile devices but on consoles and PCs, too. That has worried the owners of Activision stock and ATVI itself. If consumers can install and play Fortnite and similar games for free, how will Activision justify charging high prices for its blockbuster franchise, Call of Duty?ATVI is well-positioned in mobile devices through its ownership of King Digital, the maker of the popular, free mobile game, Candy Crush. In Q4, King's revenue grew 5% YoY to $543 million, and its operating income jumped 28% to $207 million. And for the first time since ATVI acquired King, its monthly active users reached 268 million, thanks to the launch of Candy Crush Friends in October 2018.For now, Activision is strategically well-positioned to grow its market share in the free-to-play games market. Using effective marketing techniques, ATVI could increase its MAU and revenue in this space. Exploiting Its Core StrengthsActivision may double down on its efforts in esports and Call of Duty, and invest more in its Battle.net in 2019. It has to. It cannot afford to think only of the revenue and profits from its core titles. Instead, it needs to add tools that gamers will use and appreciate, thereby improving its monthly user metrics.Management did not go into much detail on how it would reinvigorate demand for its Call of Duty franchise. In the second half of last year, demand for the latest game in the series slowed even though ATVI lowered the prices it charged for the game. ATVI's World of Warcraft game did not perform any better even after new features were added to it.As expected, Activision said on its Q4 conference call that it would cut its operating costs and lay off some of its employees, while putting more resources into its digital network. Potential Catalysts for Activision StockBlizzard's strong Q4 results may continue in 2019. Its success in China will continue thanks to the benefit of its extended deal with NetEase (NASDAQ:NTES). The two firms began their collaboration in 2008, a move that brought Starcraft II and the Battle.net platform to China. The extension will bring Diablo, World of Warcraft, Hearthstone, Heroes of the Storm and Overwatch to the region.Despite laying off 1,500 of its employees, Activision is hiring talented game developers to bolster Overwatch, the Call of Duty franchise, and the Candy Crush games. If these developers improve the games on which they're working, gamers will come back and maybe open their wallets to buy in-game products and additional console games in 2019. The Bottom Line on Activision Stock2019 is a transition year for Activision, so expect ATVI stock to trade in a range instead of bouncing higher. 26 analysts cover Activision stock, and 17 of them rate the stock a 'buy.' Per Tipranks, analysts' average price target on Activision stock is $55 per share. If investors use a five-year DCF Revenue Exit model that assumes just 5% revenue growth over the next year, Activision stock may still drop another 10%.But Activision stock is close to becoming a value name. Assuming customers return in 2020 after the company boosts its spending this year, ATVI stock could be a good investment for those who like to buy and hold stocks.As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 6 Hot Stocks For Goldman Sachs' New Investing Strategy * 10 Smart Money Stocks to Buy Now * The 10 Best Cheap Stocks to Buy Right Now Compare Brokers The post Why Activision Stock May Rally in 2020 appeared first on InvestorPlace.
Chief Financial Officer Yang Zhaoxuan told analysts on a conference call that select regulatory agencies are tweaking the process through which developers seek approval to make money off titles, but that didn’t equate to a hold-up. The company is preparing for the launch of Activision Blizzard Inc.’s hotly anticipated hack-and-slash title in China. “Some provincial and local regulators have modified the format of material submissions but we do not interpret that as a shutdown of new game approvals,” Yang said.
On a per-share basis, the Beijing-based company said it had net income of $1.92. Earnings, adjusted for stock option expense, were $2.66 per share. The internet technology company posted revenue of $2.89 ...
NetEase Inc. shares rose 1.3% in the extended session Wednesday after the company beat earnings expectations. The China-based company reported fourth-quarter net income of $246.9 million, or $1.92 per American depositary share. Adjusted for items such as stock-based compensation, earnings were $2.66 a share. Revenue rose 35.8% to $2.89 billion. Analysts surveyed by FactSet had estimated adjusted earnings of $2.46 a share on revenue of $2.94 billion. For the first quarter, analysts model adjusted earnings of $2.93 million on sales of $2.87 billion. NetEase stock has fallen 25% in the past year, with the S&P 500 index rising 2.3%.
If NetEase pops above its monthly risky level at $240.74, the Chinese Internet technology company has upside to my annual risky level at $292.19. The stock closed up 1.29% Wednesday at $232.60 -- in bull market territory, still far above its 52-week intraday low of $184.80 set on Sept. 11. Longer term, it's been a volatile ride for NetEase.
BEIJING , Feb. 20, 2019 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES) ("NetEase" or the "Company"), one of China's leading internet and online game services providers, today announced ...
Want to participate in a short research study? Help shape the future of investing tools and receive a $20 prize! With a market capitalization of US$30b, NetEase, Inc. (NASDAQ:NTES) isRead More...
Chinese companies have suffered a tumultuous period over the trailing year, and NetEase.com (NASDAQ:NTES) is no different. In 2018, NTES stock returned a massive loss of nearly 32%, due in large part to the U.S.-China economic conflict. But with its fourth-quarter fiscal 2018 earnings report just around the corner, will NetEase turn things around?Source: BigWorld Technology via YouTube (Modified)Technically, the current momentum -- or lack thereof -- don't bode well. After trudging forward since hitting a low in September, NetEase stock lost traction earlier this month. Year-to-date, NTES shares are about 2% under parity, which isn't a great look for management. After all, they're trying to convince investors that the worst is behind them. Changes for NetEaseHowever, recent news involving Amazon (NASDAQ:AMZN) just might shake up NTES stock from its doldrums. For over a decade, Amazon attempted to crack the Chinese retail code but to little success. In 2016, the tech superstar managed to capture less than 1% of the Chinese commerce sector. Nearer-term data suggests things haven't changed that much.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAs a result, industry reports indicate that Amazon will merge its China-based import arm with Kaola, a Chinese shopping platform. NTES owns Kaola, which potentially adds a new wrinkle to NetEase stock. * 7 Financial Stocks With Accelerating Growth That's because NetEase either leverages diversity or suffers from an identity crisis, depending on your perspective. While most folks primarily recognize NTES stock as an investment in Chinese video games, the underlying firm has a rich and storied history.Initially, NTES owned a successful news portal and email business. Later, it moved to video games and e-commerce via Kaola. At the same time, it's also operating music and anime-content streaming services, working with and conversely competing against Tencent (OTCMKTS:TCEHY).Merging with an Amazon-run business offers several synergies. But will investors find NetEase stock too complicated for its own good? NTES Stock Faces a Credibility RiskWhile some analysts may find encouragement with the latest rumors, neither NetEase nor Amazon have confirmed them yet. More importantly, the investing public will likely seek tangible results from NTES stock. Unfortunately, this arena is where the gaming/e-commerce/streaming company has faltered.For Q4, the consensus estimate for earnings per share calls for $10.20. This is decidedly on the higher end of individual forecasts, which ranges between $6.80 and $12.31. But the general optimism also has a flip-side: the markets expect management to deliver.In the year-ago quarter, NTES generated an EPS of $9.71, badly missing consensus EPS of $12.47. Upon disclosure, NetEase stock absorbed a sharp decline. It briefly recovered before skidding throughout most of last year.Since year-over-year EPS expectations fell, NetEase must put some meat on the table. Not doing so could reduce investor confidence in an already-challenging environment.On the revenue front, Wall Street's consensus estimate targets $2.9 billion. This forecast rests right in the middle of the spectrum, which ranges from $2.8 billion to $3 billion. In Q4 2017, the company rang up $2.2 billion.From outside appearances, NetEase should at least easily best the prior-year quarter's sales haul. But for stakeholders in NTES stock, they have a much higher standard. Between fiscal years 2014 and 2017, revenue growth averaged a whopping 64%. But more than likely in FY 2018, that growth will slow to a relative snail's pace.Even if Q4 sales hit the high end of $3 billion, annual growth for 2018 will slip sharply to under 25%. The issue then becomes that the more convoluted NetEase stock has become more expensive. That additional nominal growth has disproportionately decelerated earnings. Therefore, prospective buyers want to see justification for the premium. Better Options ExistI don't want to give the impression that NTES stock is in danger of crumbling. Certainly, its positive fundamentals, such as a rock-solid balance sheet, will keep it in the game.But tech investors aren't interested in merely staying in the game: they want to see growth and lots of it. Unfortunately, the data suggests that the robust growth phase for NetEase stock has faded. Now, they're in a struggle with industry titans like Tencent and Alibaba (NYSE:BABA).Of course, the Amazon rumor is a sentiment lift for the company. But in order to bolster its e-commerce arm, management must invest significant resources. Currently, NetEase generates most of its revenue from gaming. So to make an effective transition to e-commerce will likely incur serious expenses.Management could very well pull this off. However, investors have other options which don't carry such big question marks. Therefore, I'd wait before making any risky moves towards NTES ahead of Q4.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Hot Stocks Leading the Market's Blitz Higher * 7 Strong Buy Stocks With Over 20% Upside * 5 Growthy Stocks Trading Below 15X Earnings Compare Brokers The post NetEase Stock Must Overcome Credibility Issues for Q4 Earnings appeared first on InvestorPlace.