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NetEase

NTES
65
Electronic Gaming & Multimedia · Technology
Price
$126.06
-1.05 (-0.83%)
Market Cap
$80.29B
Exchange
NASDAQ
Winston Score
65
Winston is curious
A decent business — some strong pillars, some weaker.
Data as of Oct 18, 2026 · filings through Jun 30, 2026

§How the score breaks down

Quality
Exceptional
29/30
Growth
Mixed
7/20
Cash Flow
Exceptional
10/10
Stability
Exceptional
10/10
Valuation
Strong
7/10
Ownership
Weak
1/15
Dividends
Weak
1/5

65 of 100 counted points = Winston Score 65.

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Share count falling — buybacks

−4.1% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 673.5M (2021) → 645.6M (2025)

§Winston Score History

The full picture

NetEase is a Chinese technology company best known for making and publishing video games. Its popular titles include Fantasy Westward Journey, Identity V, and games developed in partnership with Blizzard Entertainment. NetEase also runs online education, music streaming through NetEase Cloud Music, and e-commerce services, making it one of China's largest internet companies.

NetEase earns most of its revenue from in-game purchases, where players spend money on virtual items, characters, and upgrades inside its games. The company operates primarily in China but has been expanding internationally, with game studios in the United States, Japan, and Europe. Its deep library of long-running games gives it a loyal player base that is hard for competitors to pull away. The key growth driver is international expansion, as NetEase tries to reduce its dependence on the Chinese market, where government regulations on gaming — such as limits on how long minors can play — remain a significant ongoing risk.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+7.6% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-19.6% YoY

YoY Growth Rate

Earnings declining

R&D Spend

¥17.7B/ year

→ Flat (+1% vs prior year)

15.7% of revenue

In line with sector average (15%)

Steady R&D investment year-over-year

Insider Activity

0.0%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

¥201.5B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

NetEase is growing revenue at 8% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

Each metric is explained in plain language so you know exactly what you're looking at. Start your free trial now.

Quality

Profit per sale
Gross Margin
70.5%
Premium pricing power — 70.5% gross margin
Profit after running costs
Operating Margin
40.2%
Excellent — 40.2% operating margin
Return on the money invested
ROCE
22.8%
Exceptional — 22.8% return on capital

ROIC between 15% and 25%. Every dollar invested in the business earns 15 to 25 cents back per year.

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Growth

Sales growth
Sales YoY
+6.2%
Slow sales growth (+6.2% YoY)
Profit growth
EPS YoY
-5.3%
Earnings shrinking (-5.3% YoY)

Slight earnings drop. Typical near a cyclical low.

How steady the profit is
EPS Consistency
5/8 quarters
Mixed — about half the quarters showed growth

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Cash Flow

Profit that turns into cash
Cash Conversion
157%
Turns 157% of profit into real cash
Spare cash per sale
FCF Margin
42.8%
Converts sales into free cash efficiently (42.8%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns
Debt / Equity
0.08
Conservative — low debt load (0.08)
Covers its interest
Interest Cover
100.00x
—
Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
16.6x
Fair value — P/E 16.6

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

Cheaper or dearer next year
P/E vs Forward
+5.4
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (16.6 → 11.2)

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Dividends

Dividend
Dividend Yield
1.59%
Small dividend — 1.59% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend record
Dividend Growth
+1.0%
Dividend flat
Payout Ratio
42%
no trend
Pays out a modest share of profit and keeps the rest to reinvest. Room to keep paying through a weak year.

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