| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 65 | 15.6x | 17.8x | Around median | |
Growth | 53 | 6.2% | 7.1% | Around median | |
Quality | 93 | 19.6% | 4.5% | Top tier | |
Safety | 91 | — | 2.6x | Top tier | |
Capital Return | 51 | 0.55% | 2.12% | Around median | |
Momentum | 42 | -1.5% | 2.9% | Around median | |
Sentiment | 63 | 12 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
NetEase operates a digital ecosystem led by online games and related value-added services, alongside Youdao for learning and AI-powered services, NetEase Cloud Music, and innovative and commercial businesses including Yanxuan. In Q2 FY2026, games and related services generated RMB 25.0 billion out of RMB 30.1 billion in revenue, or about 83%, while Youdao generated about RMB 1.5 billion, Cloud Music about RMB 2.0 billion, and innovative businesses and others about RMB 1.6 billion.
Revenue in Q2 FY2026 reached approximately RMB 30.1 billion, or $4.4 billion, with revenue from games and related services growing 10% year over year. Non-GAAP net income attributable to shareholders was RMB 7.7 billion, or $1.1 billion, while non-GAAP earnings per ADS were $1.78 and came in below analyst estimates due to investment losses; news reports stated that those losses amounted to $435 million.
Gross profit margin increased to 70.5% in Q2 FY2026 from 64.7% a year earlier. The margin was 76.1% for games and related services, 48.9% for Youdao, 37.4% for Cloud Music, and 43.4% for innovative businesses and others. On an annual basis, revenue increased from $105.3 billion in FY2024 to $112.6 billion in FY2025, while net income rose from $29.7 billion to $33.8 billion and earnings per share increased from 9.19 to 10.48.
The analyst consensus is “Buy,” with an average target of $162.33 and a range of $158 to $169, and the average is approximately 1.7% above the 52-week range high of $159.55. The earnings summary dated August 20, 2026 cited a price-to-earnings multiple of 15.3 times and a free cash flow yield of 9.5%, but these metrics should be balanced against the 8% decline in first-half non-GAAP earnings and the Q2 FY2026 earnings shortfall resulting from investment losses. The 52-week range of $106.06–$159.55 reflects a wide valuation spread, while the analyst target range assumes continued operating strength and that investment portfolio losses do not become a recurring source of pressure.
Figures in the text are as of 2026-08-27; the live price is shown at the top of the page.
Games and related value-added services were the primary driver, generating RMB 25.0 billion of the total RMB 30.1 billion in Q2 FY2026 revenue. The segment grew 10% year over year, driven by titles including Fantasy Westward Journey and Where Winds Meet. The segment's gross profit margin also rose to 76.1% from 70.2% a year earlier due to lower revenue-sharing costs with platforms.
Revenue reached approximately $4.4 billion in Q2 FY2026, exceeding expectations by about $30 million. However, investment losses of $435 million weighed on net income, resulting in non-GAAP earnings per ADS of $1.78 versus expectations of $2.31. Non-GAAP net income attributable to shareholders was RMB 7.7 billion, while first-half net income declined 8% year over year to RMB 19 billion.
Sword of Justice surpassed ten million active players on the launch day of the New World update, and concurrent users reached their highest level in two years. Eggy Party reached approximately 700 million registered users, with more than 100 million monthly active users and cumulative creator rewards reaching RMB 200 million. Positive Steam ratings for Where Winds Meet also remained above 87%, while Marvel Rivals reached second place on the global sales chart and first place in several regions, including the United States.
Automated analysis for informational purposes only — not investment advice.
Youdao launched the Confucius 4 model in Q2 FY2026, improving visual reasoning in mathematics and physics while reducing inference costs. An upgrade to the translation model also increased inference speed by approximately 80%, and subscriptions to AI-powered services continued to show strong momentum. Youdao generated approximately RMB 1.5 billion in quarterly revenue, up 9% sequentially and 3% year over year, with its gross margin rising to 48.9% from 43.0%.
Management acknowledged during the August 20, 2026 call that Sea of Remnants faced criticism because the learning curve in the early stages was not simplified enough, affecting the launch experience in China. The company is working to simplify early content and improve the experience, but it did not provide a financial figure demonstrating the success of these measures. Ananta remains under refinement and faces competition in the urban open-world category, while management did not specify a launch date during the call.
Net cash stood at RMB 167.5 billion on June 30, 2026, up from RMB 163.5 billion at the end of FY2025. As of June 30, 2026, the company had repurchased approximately 24.8 million ADSs at a cost of about $2.3 billion under a $5 billion repurchase program. The board also approved a dividend of $0.096 per share, or $0.48 per ADS, for Q2 FY2026.
