NetEase’s Resilient Growth and Stability: Buy Recommendation Despite Revenue Miss
Bank of America Securities analyst Miranda Zhuang maintains a Buy rating on NetEase with a $166.00 price target, citing growth potential and stability despite a revenue miss. NetEase's net profit remains consistent, supported by strong performance in FWJ PC and healthy growth in online games and services. The share buyback program extension further supports the Buy recommendation. China Galaxy International also maintains a Buy rating with the same price target.
Miranda Zhuang, an analyst from Bank of America Securities, maintained the Buy rating on NetEase. The associated price target is $166.00.
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Miranda Zhuang’s rating is based on several key factors that highlight NetEase’s potential for growth and stability. Despite a slight miss on revenue expectations, NetEase’s net profit remained consistent, showing resilience in its financial performance. The strong performance of FWJ PC in the third quarter was a positive indicator, aligning with investor expectations and contributing to the Buy rating.
Additionally, the online games and value-added services segment showed a healthy revenue growth, driven by key titles and a recovery in certain games. Although there were some declines in other segments like Cloud Music and innovative businesses, the overall profitability remained solid with a group gross profit margin of 64.1%. The extension of the share buyback program further indicates confidence in the company’s future prospects, supporting the Buy recommendation.
In another report released today, China Galaxy International also maintained a Buy rating on the stock with a $166.00 price target.
