NetEase (NTES) Dips More Than Broader Markets: What You Should Know

NetEase (NTES) closed at $91.54 in the latest trading session, marking a -1.55% move from the prior day. This change lagged the S&P 500's daily loss of 0.28%. Elsewhere, the Dow lost 0.14%, while the tech-heavy Nasdaq lost 0.01%.

Coming into today, shares of the internet technology company had lost 0.52% in the past month. In that same time, the Computer and Technology sector gained 8.21%, while the S&P 500 gained 8.35%.

Wall Street will be looking for positivity from NetEase as it approaches its next earnings report date. On that day, NetEase is projected to report earnings of $1.10 per share, which would represent year-over-year growth of 35.8%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.44 billion, up 8.14% from the year-ago period.

NTES's full-year Zacks Consensus Estimates are calling for earnings of $4.60 per share and revenue of $14.56 billion. These results would represent year-over-year changes of +17.05% and +7.22%, respectively.

Investors might also notice recent changes to analyst estimates for NetEase. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.83% lower within the past month. NetEase currently has a Zacks Rank of #4 (Sell).

Valuation is also important, so investors should note that NetEase has a Forward P/E ratio of 20.24 right now. Its industry sports an average Forward P/E of 20.24, so we one might conclude that NetEase is trading at a no noticeable deviation comparatively.

Meanwhile, NTES's PEG ratio is currently 1.38. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Internet - Software and Services was holding an average PEG ratio of 1.11 at yesterday's closing price.

The Internet - Software and Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 175, which puts it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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