NetEase Option Alert: Jun 20 $125 Puts at the Bid: 294 vs 0 OI; Earnings 2/20 Before Open 

NetEase Option Alert: Jun 20 $125 Puts at the Bid: 294 @ $26.0 vs 0 OI; Earnings 2/20 Before Open Ref=$102.55

NetEase (NASDAQ:NTES) 주식

NETEASE INC-ADR

NetEase

Founded in the late 1990s as an internet portal, NetEase has transformed into a leading force in the second-largest online game company gaming in China. While its initial success was built upon the massively multiplayer online role-playing game Fantasy Westward Journey, NetEase has expanded its portfolio with captivating franchises that resonate with both domestic and international players. Over the past decade, the company has created titles such as Justice, Identity V, Naraka: Bladepoint, and Eggy Party, all of which maintain significant player bases today. Beyond in-house development, the company also collaborates with likes of Microsoft and Marvel to create and publish games based on renowned IPs, including World of Warcraft, Diablo Immortal, and Marvel Rivals.

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NetEase, Inc. - American Depositary Shares, each representing 5 ordinary shares

NetEase Inc

NetEase's (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NYSE">NTES</a>) short percent of float has fallen 17.5% since its last report. The company recently reported that it has 3.49 million shares sold short, which is 0.99% of all regular shares that are available for trading. Based on its trading volume, it would take traders 2.9 days to cover their short positions on average.
<h3>Why Short Interest Matters</h3>
Short interest is the number of shares that have been sold short but have not yet been covered or closed out. <a href="https://www.benzinga.com/money/how-to-short-a-stock?adType=benzinga-insights&amp;ad=short-interest&amp;campaign=wallstreetadvantage">Short selling</a> is when a trader sells shares of a company they do not own, with the hope that the price will fall. Traders make money from short selling if the price of the stock falls and they lose if it rises.
Short interest is important to track because it can act as an indicator of market sentiment towards a particular stock. An increase in short interest can signal that investors have become more bearish, while a decrease in short interest can signal they have become more bullish.
See Also: <a href="https://www.benzinga.com/short-interest?adType=benzinga-insights&amp;ad=short-interest&amp;campaign=wallstreetadvantage">List of the most shorted stocks</a>
<h3>NetEase Short Interest Graph (3 Months)</h3>
<img src="https://www.benzinga.com/files/images/story/2025/1740761138_0.png" alt="short_fig" />
As you can see from the chart above the percentage of shares that are sold short for NetEase has declined since its last report. This does not mean that the stock is going to rise in the near-term but traders should be aware that less shares are being shorted.
<h3>Comparing NetEase's Short Interest Against Its Peers</h3>
Peer comparison is a popular technique amongst analysts and investors for gauging how well a company is performing. A company's peer is another company that has similar characteristics to it, such as industry, size, age, and financial structure. You can find a company's peer group by reading its 10-K, proxy filing, or by doing your own similarity analysis.
According to <a href="https://www.benzinga.com/pro/">Benzinga Pro</a>, NetEase's peer group average for short interest as a percentage of float is 3.23%, which means the company has less short interest than most of its peers.
Did you know that increasing short interest can actually be bullish for a stock? <a href="https://www.benzinga.com/money/how-to-make-money-on-a-short-squeeze?adType=benzinga-insights&amp;ad=short-interest&amp;campaign=wallstreetadvantage">This post by Benzinga Money explains how you can profit from it.</a>
This article was generated by Benzinga's automated content engine and was reviewed by an editor.

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Short Ideas

Peering Into NetEase's Recent Short Interest

<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="900" height="600" src="https://contributor-assets.benzinga.com/wp-content/uploads/2025/02/25061542/Youdao-0225.jpeg" alt="" class="wp-image-6487" srcset="https://contributor-assets.benzinga.com/wp-content/uploads/2025/02/25061542/Youdao-0225.jpeg 900w,https://contributor-assets.benzinga.com/wp-content/uploads/2025/02/25061542/Youdao-0225-300x200.jpeg 300w,https://contributor-assets.benzinga.com/wp-content/uploads/2025/02/25061542/Youdao-0225-768x512.jpeg 768w" sizes="(max-width: 900px) 100vw, 900px" /></figure>
The education company's marketing services revenue flatlined in the final quarter of last year, following strong double-digit gains in the first three quarters

<h4 class="wp-block-heading">Key Takeaways:</h4>
<ul>
<li>Youdao's revenue began contracting in the fourth quarter, falling 9.5% year-on-year, as its fast-growing marketing services suddenly flatlined</li>
<li>The company aims to revive growth in its market services via an enhanced partnership with parent NetEase and more global sales, as its older education business shrinks</li>
</ul>
Education may be valuable, but advertising is even more so.
That's the big lesson learned over the last two years by&nbsp;Youdao Inc.&nbsp;(DAO.US), the education arm of gaming giant NetEase (XHKG:<a class="ticker" href="https://www.benzinga.com/stock/9999#XHKG">9999</a>), whose&nbsp;<a href="https://www.prnewswire.com/news-releases/youdao-reports-fourth-quarter-and-fiscal-year-2024-unaudited-financial-results-302381231.html">latest quarterly results</a>&nbsp;show how marketing services could soon become the company's main breadwinner.
Among other things, the results showed Youdao posted its first-ever annual profit, ending years of losses since its New York listing six years ago. But that milestone was overshadowed by a few more worrisome signals, led by a sharp slowdown in the company's marketing services that were previously a fast-rising star. That came as Youdao's original core learning services also continued to show steep declines, causing its overall revenue to start contracting.
The company tried to ease concerns with discussion of a couple of new initiatives to jumpstart the marketing services business, which we'll detail shortly. Like many other Chinese tech companies, it also talked copiously about AI, noting it had already incorporated DeepSeek into many of its products.
"We are launching our AI Native strategy integrating AI more comprehensively across our business lines by, for example, automating our advertising platforms and introducing AI-driven tutoring for our course customers," noted Youdao CEO Zhou Feng on Youdao's earnings call, which included more than 30 references to AI by various company officials.
Despite its words of reassurance on reviving marketing services and greater use of AI, investors weren't convinced. Youdao's shares fell 6.8% in the two trading days since the results were announced last Friday.
Here, we should point out that this sell-off comes after a remarkable run-up that saw Youdao's shares nearly triple over the last six months, including a 40% jump this year alone. At its latest close of $9.68, the shares now trade at a four-year high, lifted by both the company's own relatively strong performance and a broader wave of bullishness towards overseas-listed Chinese stocks.
Against that backdrop, the latest two-day sell-off looks a bit like profit taking, and the next few weeks will provide a better picture of whether its rally can continue. Even at the latest levels, the stock still trades 43% below its IPO price of $17 during headier days for Chinese stocks when the company first listed in 2019.
That said, we'll take a deeper dive into Youdao's latest results to see what's happening inside this company that's part of NetEase, one of China's earliest internet companies that has also become one of its most successful gaming operators. Online learning was Youdao's original main breadwinner, but it has been scaling back that part of the business following a government crackdown that outlawed after-school tutoring services in core curriculum areas for K-12 students in 2021 and 2022.
The company's marketing services division was picking up most of the slack for its falling education business to keep overall revenue rising in the first three quarters of last year, though the growth rate was slowing throughout the year. That growth spurt ended in the fourth quarter, however, when Youdao's overall revenue fell by 9.5% to 1.3 billion yuan ($179 million) from 1.5 billion yuan in the same quarter a year earlier.
<h4 class="wp-block-heading">Marketing services flatline</h4>
Within the company's broader revenue pie, learning services fell 21.2% to 618 million yuan, accounting for 48% of total revenue. That part of the business accounted for about two-thirds of the company's revenue as recently as 2022, but has been shrinking rapidly since then and fell to less than half in last year's second quarter.
"Since the summer we have proactively focused on courses and services with strong demand and maintained a rational approach to customer acquisition," said CEO Zhou, explaining the reasons behind the rapid declines. "This strategy has enhanced our overall health."
Such a shift looked acceptable when the company's marketing services were posting strong growth, including a 46% year-on-year rise in the third quarter and a doubling in the first half of last year. The shift to advertising services also looked like a shrewd move strategically since such services are far less likely to fall victim to future government crackdowns than the far more sensitive education sector.
But Youdao's marketing services revenue suddenly flatlined in last year's fourth quarter, rising just slightly to 482 million yuan from 474 million yuan a year earlier, accounting for 37% of total revenue in the latest quarter. The company didn't provide a detailed explanation for the slowdown, though we should note that overall advertising spending has been sluggish in China lately due to the uncertain business climate.
Instead, Youdao executives focused on a couple of new initiatives that they hope will jumpstart growth in that part of its business. The one with the most near-term potential will probably come from an enhanced relationship with NetEase offering more services across its parent's large array of internet assets, including not only games but also music and its popular email service. To do that, Youdao and NetEase formed a formal marketing services partnership last year. That relationship now accounts for less than 10% of its advertising revenue, and CEO Zhou said "we expect this to grow considerably in 2025."
The other initiative comes from expanding its marketing services outside China. The company has been doing that through a relationship with TikTok and recently signed a new deal with Google to further that effort. Youdao President Jin Lei noted that international advertising revenue more than doubled last year to about 100 million yuan, accounting for more than one-fifth of the marketing services total.
In valuation terms, Youdao trades at a price-to-sales (P/S) ratio of 1.57, which looks relatively low compared to some of its peers. The much larger&nbsp;New Oriental&nbsp;(EDU.US; 9901.HK) trades higher with a P/S ratio of 1.8, and&nbsp;TAL Education&nbsp;(TAL.US) is even stronger with a ratio of 4.28. That suggests Youdao's stock could still have some upside potential even after the recent big run-up. But first it will need to quickly halt its revenue declines by jump-starting its marketing services.

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Youdao Looks To Parent, Global Markets To Revive Stalling Growth

Barclays analyst Jiong Shao maintains NetEase (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>) with a Equal-Weight and raises the price target from $82 to $104.

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Analyst Ratings

Barclays Maintains Equal-Weight on NetEase, Raises Price Target to $104

Shares of Youdao Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DAO#NYSE">DAO</a>) fell slightly following the company's fourth-quarter results, mainly on profit-taking with the stock having <a href="https://www.benzinga.com/quote/DAO">climbed almost 45% over the past month</a>.
The results came amid an <a href="https://www.benzinga.com/earnings">exciting earnings season</a>. Here's a deep dive into Youdao's financial release.
Analyst Ratings For Youdao
The company is known for its online platform that focuses on providing learning tools and services. Powered by AI, the platform has been developed by internet services company NetEase, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>).
Morgan Stanley, Jefferies and Citigroup have a Buy rating on Youdao. Check out <a href="https://www.benzinga.com/analyst-ratings/analyst-color">other analyst stock ratings</a>.
Youdao: Highlights Of Financial Release
For the fourth quarter, Youdao reported net revenues of RMB 1.3 billion ($180 million), down 9.5% year-on-year. Management indicated that the top-line contraction was mainly due to a decline in revenues from learning services.
Despite the decline in revenues, profitability improved in the quarter. Income from operations reached RMB 84.2 million ($11.6 million), representing 10.3% year-on-year growth.
The Chinese company reported earnings of 70 cents per share for the fourth quarter, significantly beating the consensus estimate of 54 cents per share by 30.6%.
For the full year, net revenues reached RMB 5.6 billion ($770 million), up 4.4% year-on-year. Income from operations reached RMB 148.8 million ($20.51 million), compared to a loss of RMB 466.3 million ($64.26 million) in 2023.
Management said that Youdao Lingshi, the service that provides online learning courses, improved customer loyalty in the fourth quarter. Backed by Youdao Lingshi's AI-powered tiered learning videos and learning counseling, retention rates surpassing 70% in the fourth quarter, marking a year-over-year improvement of over 5 percentage points.
The company also indicated that the transition from larger to smaller classes had driven an over 20% year-on-year increase in gross billings in the fourth quarter.
Youdao Desktop Translation won the "Best Online Education App Award" at the Microsoft Store 2024 Annual App Awards.
Youdao Leverages DeepSeek
On February 6, Youdao announced the full deployment of DeepSeek-R1 in its learning apps, courses, ad platforms and hardware devices.
Mr. P AI Tutor, Youdao's popular tool that provides deeper insights into learning materials, is being powered by DeepSeek-R1 to offer "a faster, more responsive, and cost-efficient service," the company said in a statement.
Mr. P AI Tutor is available in several languages. The company said that the "long reasoning chains offered by DeepSeek-R1" has helped Mr. P AI Tutor to improve its personalized Q&amp;A capabilities, "providing deeper and more accurate solutions and significantly upgrading the user experience." The company plans to launch Mr. P AI Tutor 2.0 in the near term.
DeepSeek's advanced reasoning capabilities are fully deployed in other products, like SpaceOne.
Youdao has also introduced the&nbsp;SpaceOne full-screen tutoring device, an AI-powered learning tool designed for students and professionals.
"We believe that large AI models should serve not merely as additional features, but as autonomous agents that drive outcomes," CEO Feng Zhou said during the earnings call. He added that Youdao plans to launch an "AI Native" strategy, which involves "leveraging AI as a foundational layer across our business lines."
DAO Price Action: Shares of Youdao had declined by 1.25% to close at $10.26 on Friday.
Photo: Shutterstock

Earnings

Earnings Beats

Youdao Turns Profitable In 2024, Leveraging DeepSeek To Upgrade User Experience In Learning

Benchmark analyst Fawne Jiang maintains NetEase (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>) with a Buy and raises the price target from $105 to $115.

Benchmark Maintains Buy on NetEase, Raises Price Target to $115

On Thursday, NetEase, Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>) reported a fiscal fourth-quarter revenue decline of 1.4% year-on-year to $3.66 billion (26.7&nbsp;billion Chinese yuan), missing the&nbsp;<a target="_blank" href="https://www.benzinga.com/pressreleases/25/02/n43840713/netease-announces-fourth-quarter-and-fiscal-year-2024-unaudited-financial-results" rel="noreferrer noopener">analyst consensus estimate of $3.74 billion</a>.
The Chinese gaming&nbsp;player's&nbsp;adjusted EPADS of $2.07 beat the&nbsp;<a target="_blank" href="https://www.benzinga.com/calendars/earnings" rel="noreferrer noopener">analyst consensus estimate of $1.77</a>. The stock fell after the report.
Also Read: <a target="_blank" href="https://www.benzinga.com/25/02/43812289/wix-q4-earnings-beats-estimates-raises-2025-outlook-ai-powered-expansion-and-market-share-gains" rel="noreferrer noopener">Wix Q4 Earnings: EPS Beat, Issues Strong 2025 Outlook With Two Products Launch</a>
Segments and margins: Games and related value-added services revenues rose 1.5%&nbsp;year over year&nbsp;to $2.9 billion.&nbsp;The corresponding gross margin decreased by 280 bps to 67.5%, mainly attributable to higher revenue contributions from licensed games, which have comparatively lower gross profit margins.
Youdao,&nbsp;Inc.'s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DAO#NYSE">DAO</a>) revenue declined by 9.5%&nbsp;year over year&nbsp;to $183.6 million,&nbsp;and&nbsp;the corresponding gross margin declined by 210 bps to 47.8%, primarily due to decreased net revenues from its&nbsp;learning services.
Cloud&nbsp;Music's&nbsp;revenues were $257.6 million, down 5.3% year over year, and its gross margin expanded by 160 bps to 31.9%, mainly due to increased net revenues from sales of membership subscriptions and continued improvement in cost control measures.
Innovative businesses and other revenue declined 17.0%&nbsp;year over year&nbsp;to $313.1 million, and the gross margin increased by 340 bps to 37.8%, mainly due to increased gross profit margins from Yanxuan.
As&nbsp;of December 31, 2024, NetEase held $18.0 billion in cash and equivalents and generated $1.78 billion in operating cash flow.
Dividend:&nbsp;The board of directors approved a dividend of&nbsp;$1.22025&nbsp;per ADS for the fourth quarter of 2024 versus $0.4350&nbsp;per ADS for the third quarter.
NetEase confirmed the laying off of the U.S.-based developers working on&nbsp;Marvel Rivals, the Verge <a target="_blank" href="https://www.theverge.com/news/615288/marvel-rivals-layoffs-netease-overseas-investments" rel="noreferrer noopener">cites</a> the company. However, the development of&nbsp;Rivals&nbsp;would continue with a core group of developers based in China.
Price Action: NTES stock is down 5.91% at $98.01 at&nbsp;the last check on Thursday.
Also Read:
<ul>
<li><a href="https://www.benzinga.com/25/02/43812509/garmin-q4-earnings-wearables-and-adventure-watches-drive-growth-raises-dividend-20-projects-68-billion-revenue-for-2025" target="_blank" rel="noreferrer noopener">Garmin Q4 Earnings: Wearables and Adventure Watches Drive Growth, 20% Dividend Hike, Stock Soars</a></li>
</ul>
Photo via Shutterstock

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NetEase Q4 Earnings: Revenue Miss, Gaming and Cost Controls Drive Margins, Boosts Dividend

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NetEase shares are trading lower after the company reported worse-than-expected Q4 revenue results.

The board of directors approved a dividend of US$0.24405 per share (US$1.22025 per ADS) for the fourth quarter of 2024 to holders of ordinary shares and holders of ADSs as of the close of business on March 6, 2025, Beijing/Hong Kong Time and New York Time, respectively, payable in U.S. dollars.
NetEase paid a dividend of US$0.0870&nbsp;per share (US$0.4350 per ADS) for the third quarter of 2024 in December 2024.

NetEase Board Approved A Dividend Of $1.22025/ADS For Q4 Vs $0.4350/ADS For Q3

NetEase Q4 Adj EPADS $2.07 Beats $1.77 Estimate, Sales $3.66B Miss $3.74B Estimate

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Earnings Scheduled For February 20, 2025

5 analysts have expressed a variety of opinions on NetEase (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>) over the past quarter, offering a diverse set of opinions from bullish to bearish.
The following table summarizes their recent ratings, shedding light on the changing sentiments within the past 30 days and comparing them to the preceding months.
<table>
<thead>
<tr>
<th></th>
<th align="right">Bullish</th>
<th align="right">Somewhat Bullish</th>
<th align="right">Indifferent</th>
<th align="right">Somewhat Bearish</th>
<th align="right">Bearish</th>
</tr>
</thead>
<tbody>
<tr>
<td>Total Ratings</td>
<td align="right">3</td>
<td align="right">2</td>
<td align="right">0</td>
<td align="right">0</td>
<td align="right">0</td>
</tr>
<tr>
<td>Last 30D</td>
<td align="right">0</td>
<td align="right">1</td>
<td align="right">0</td>
<td align="right">0</td>
<td align="right">0</td>
</tr>
<tr>
<td>1M Ago</td>
<td align="right">1</td>
<td align="right">0</td>
<td align="right">0</td>
<td align="right">0</td>
<td align="right">0</td>
</tr>
<tr>
<td>2M Ago</td>
<td align="right">0</td>
<td align="right">1</td>
<td align="right">0</td>
<td align="right">0</td>
<td align="right">0</td>
</tr>
<tr>
<td>3M Ago</td>
<td align="right">2</td>
<td align="right">0</td>
<td align="right">0</td>
<td align="right">0</td>
<td align="right">0</td>
</tr>
</tbody>
</table>
Insights from analysts' 12-month price targets are revealed, presenting an average target of $113.4, a high estimate of $122.00, and a low estimate of $105.00. This upward trend is apparent, with the current average reflecting a 3.85% increase from the previous average price target of $109.20.
<img src="https://www.benzinga.com/files/images/story/2025/1739394077_0.png" alt="price target chart" />
<h2>Investigating Analyst Ratings: An Elaborate Study</h2>
A comprehensive examination of how financial experts perceive NetEase is derived from recent analyst actions. The following is a detailed summary of key analysts, their recent evaluations, and adjustments to ratings and price targets.
<table>
<thead>
<tr>
<th>Analyst</th>
<th>Analyst Firm</th>
<th>Action Taken</th>
<th>Rating</th>
<th>Current Price Target</th>
<th>Prior Price Target</th>
</tr>
</thead>
<tbody>
<tr>
<td>Alex Poon</td>
<td>Morgan Stanley</td>
<td>Raises</td>
<td>Overweight</td>
<td>$117.00</td>
<td>$108.00</td>
</tr>
<tr>
<td>Eddie Leung</td>
<td>B of A Securities</td>
<td>Raises</td>
<td>Buy</td>
<td>$122.00</td>
<td>$120.00</td>
</tr>
<tr>
<td>Alex Poon</td>
<td>Morgan Stanley</td>
<td>Raises</td>
<td>Overweight</td>
<td>$108.00</td>
<td>$90.00</td>
</tr>
<tr>
<td>Alicia Yap</td>
<td>Citigroup</td>
<td>Raises</td>
<td>Buy</td>
<td>$115.00</td>
<td>$108.00</td>
</tr>
<tr>
<td>Fawne Jiang</td>
<td>Benchmark</td>
<td>Lowers</td>
<td>Buy</td>
<td>$105.00</td>
<td>$120.00</td>
</tr>
</tbody>
</table>
<h3>Key Insights:</h3>
<ul>
<li>Action Taken: Analysts frequently update their recommendations based on evolving market conditions and company performance. Whether they 'Maintain', 'Raise' or 'Lower' their stance, it reflects their reaction to recent developments related to NetEase. This information provides a snapshot of how analysts perceive the current state of the company.</li>
<li>Rating: Delving into assessments, analysts assign qualitative values, from 'Outperform' to 'Underperform'. These ratings communicate expectations for the relative performance of NetEase compared to the broader market.</li>
<li>Price Targets: Delving into movements, analysts provide estimates for the future value of NetEase's stock. This analysis reveals shifts in analysts' expectations over time.</li>
</ul>
Analyzing these analyst evaluations alongside relevant financial metrics can provide a comprehensive view of NetEase's market position. Stay informed and make data-driven decisions with the assistance of our Ratings Table.
<a href="https://www.benzinga.com/quote/NTES/analyst-ratings?utm_source=Benzinga Insights">Stay up to date on NetEase analyst ratings.</a>
<h2>Delving into NetEase's Background</h2>
NetEase, which started on an internet portal service in 1997, is a leading online services provider in China. Its key services include online/mobile games, cloud music, media, advertising, email, live streaming, online education, and e-commerce. The company develops and operates some of the China's most popular PC client and mobile games, and it partners with global leading game developers, such as Blizzard Entertainment and Mojang (a Microsoft subsidiary).
<h3>Financial Insights: NetEase</h3>
Market Capitalization Analysis: With an elevated market capitalization, the company stands out above industry averages, showcasing substantial size and market acknowledgment.
Revenue Growth: NetEase's revenue growth over a period of 3 months has faced challenges. As of 30 September, 2024, the company experienced a revenue decline of approximately -3.89%. This indicates a decrease in the company's top-line earnings. As compared to its peers, the revenue growth lags behind its industry peers. The company achieved a growth rate lower than the average among peers in Communication Services sector.
Net Margin: NetEase's net margin excels beyond industry benchmarks, reaching 24.95%. This signifies efficient cost management and strong financial health.
Return on Equity (ROE): NetEase's ROE stands out, surpassing industry averages. With an impressive ROE of 4.97%, the company demonstrates effective use of equity capital and strong financial performance.
Return on Assets (ROA): The company's ROA is a standout performer, exceeding industry averages. With an impressive ROA of 3.55%, the company showcases effective utilization of assets.
Debt Management: The company maintains a balanced debt approach with a debt-to-equity ratio below industry norms, standing at 0.08.
<h2>Analyst Ratings: Simplified</h2>
Benzinga tracks 150 analyst firms and reports on their stock expectations. Analysts typically arrive at their conclusions by predicting how much money a company will make in the future, usually the upcoming five years, and how risky or predictable that company's revenue streams are.
Analysts attend company conference calls and meetings, research company financial statements, and communicate with insiders to publish their ratings on stocks. Analysts typically rate each stock once per quarter or whenever the company has a major update.
In addition to their assessments, some analysts extend their insights by offering predictions for key metrics such as earnings, revenue, and growth estimates. This supplementary information provides further guidance for traders. It is crucial to recognize that, despite their specialization, analysts are human and can only provide forecasts based on their beliefs.
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This article was generated by Benzinga's automated content engine and reviewed by an editor.

The Analyst Verdict: NetEase In The Eyes Of 5 Experts

NetEase shares are trading higher after Morgan Stanley raised its price target from $108 to $117.

Morgan Stanley analyst Alex Poon maintains NetEase (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>) with a Overweight and raises the price target from $108 to $117.

Morgan Stanley Maintains Overweight on NetEase, Raises Price Target to $117

QFIN

Shares of US-listed Chinese stocks are trading higher amid China's efforts to  get insurers to invest in stocks and support markets.

Sony Group Corp&#8217;s (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SONY#NYSE">SONY</a>) PlayStation <a target="_blank" href="https://www.benzinga.com/topic/gaming-industry" rel="noreferrer noopener">dumped two unannounced</a> live service projects at Syphon Filter&nbsp;and&nbsp;Days Gone&nbsp;developer Bend Studio and God of War&nbsp;game developer Bluepoint Games after a strategic review, Bloomberg <a target="_blank" href="https://www.bloomberg.com/news/articles/2025-01-16/sony-cancels-two-more-playstation-projects?srnd=phx-technology&amp;sref=TBDibEcD" rel="noreferrer noopener">reports</a>.
PlayStation is currently discussing with the studios how to determine their following projects.
PlayStation remains aggressively invested in live-service games, which can be monetized months and years after their launch.
Also Read: <a target="_blank" href="https://www.benzinga.com/25/01/43010198/netflixs-avod-surge-and-wwe-content-fuel-optimism-analyst-sets-1000-price-forecast" rel="noreferrer noopener">WWE, Squid Game Fuel Netflix Ad-Supported Growth: Analyst Sets $1,000 Price Forecast</a>
Sony&#8217;s strategy bore it a hit in 2024&#8217;s&nbsp;Helldivers II&nbsp;and several flops, including&nbsp;Concord, prompting it to cancel several live-service games over the last few years, including one based on Spider-Man.
Sony sold <a target="_blank" href="https://www.benzinga.com/news/earnings/24/11/41841647/sonys-q2-profit-surges-on-gaming-and-sensor-gains-but-ps5-sales-decline-raises-full-year-outlook" rel="noreferrer noopener">3.8 million PlayStation5 units</a> in the fiscal second quarter of 2024, compared to&nbsp;4.9 million a year ago. Sony&#8217;s Game &amp; Network Services revenue rose 12%&nbsp;to 1.07 trillion Japanese yen (on top of consolidated sales&nbsp;of ¥2.91 trillion), and operating income grew 184%&nbsp;to&nbsp;¥138.8 billion.
The video game industry battled challenges in the last two years, including losing <a target="_blank" href="https://www.benzinga.com/markets/equities/24/09/40829756/microsoft-cuts-650-xbox-jobs-amid-restructuring-following-activision-blizzard-deal-report" rel="noreferrer noopener">thousands of jobs</a>. Notable gaming studio closures included Netlix Inc&#8217;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NFLX#NASDAQ">NFLX</a>) <a target="_blank" href="https://www.benzinga.com/general/gaming/24/10/41462659/netflix-ends-aaa-game-development-at-california-studio" rel="noreferrer noopener">Southern California AAA</a> game studio, Team Blue, Take-Two Interactive Software Inc&#8217;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TTWO#NASDAQ">TTWO</a>) <a target="_blank" href="https://www.benzinga.com/news/24/05/38583285/grand-theft-auto-parent-shuts-two-iconic-game-studios-as-part-of-sweeping-layoffs" rel="noreferrer noopener">London&#8217;s Roll7 </a><a target="_blank" href="https://www.benzinga.com/news/24/05/38583285/grand-theft-auto-parent-shuts-two-iconic-game-studios-as-part-of-sweeping-layoffs" rel="noreferrer noopener">and</a> Seattle&#8217;s Intercept Games, Microsoft Corp&#8217;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) several <a target="_blank" href="https://www.benzinga.com/news/24/05/38732093/microsoft-shakes-up-xbox-division-closes-renowned-studios-in-major-cost-cutting-move" rel="noreferrer noopener">video-game studios</a> within its Xbox division, and NetEase Inc&#8217;s (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>) <a target="_blank" href="https://www.benzinga.com/markets/asia/24/08/40659768/netease-to-close-ouka-studios-developer-of-visions-of-mana-report" rel="noreferrer noopener">Ouka Studios</a>.
Reportedly, Krafton Inc. of&nbsp;PUBG: Battlegrounds earmarked over <a target="_blank" href="https://www.benzinga.com/25/01/42954938/pubg-developer-krafton-invests-136-million-in-game-studios-expands-ai-team-for-future-gaming-innovations" rel="noreferrer noopener">200 billion won ($136 million)</a> to over&nbsp;twelve game studios in sync with its artificial intelligence investment.
Over the past two years, Krafton incurred $680 million in investment in game studios. It also tapped Nvidia Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) to showcase more lifelike non-player characters in its Inzoi life simulation game.
Elon Musk&#8217;s&nbsp;AI startup,&nbsp;xAI, remains focused on its AI-driven game studio. It is challenging the giant game studios, which, according to the Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) chief, prioritize profit over player engagement and creativity.
Last October,&nbsp;JPMorgan analysts&nbsp;expressed optimism over&nbsp;mobile gaming trends and spending on consoles backed by the gaming pipeline.
Sony Group stock surged over 11% in the last 12 months. Investors can gain exposure to the stock through Avantis International Equity ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AVDE#NYSE">AVDE</a>) and Invesco International Dividend Achievers ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/PID#NASDAQ">PID</a>).
Price Action: SONY stock traded higher by 1.13% at $20.55 premarket at last check Friday.
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Photo via Shutterstock

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Sony Cancels Two Live-Service Games, Stays Committed to Long-Term Monetization

B of A Securities analyst Eddie Leung maintains NetEase (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>) with a Buy and raises the price target from $120 to $122.

B of A Securities Maintains Buy on NetEase, Raises Price Target to $122

NetEase shares are trading higher after Morgan Stanley upgraded the stock from Equal-Weight to Overweight and raised its price target from $90 to $108.

Top Wall Street analysts changed their outlook on these top names. For a complete view of all analyst rating changes, including upgrades and downgrades, please see our <a href="https://www.benzinga.com/analyst-stock-ratings">analyst ratings page</a>.
<ul>
<li>Needham raised the price target for Salesforce, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CRM#NYSE">CRM</a>) from $375 to $400. Needham analyst Scott Berg maintained a Buy rating. Salesforce shares closed at $324.93 on Tuesday. <a href="https://www.benzinga.com/quote/CRM/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>Truist Securities slashed Merck &amp; Co., Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MRK#NYSE">MRK</a>) price target from $130 to $110. Truist Securities analyst Robyn Karnauskas downgraded the stock from Buy to Hold. Wendy&#8217;s shares closed at $101.02 on Tuesday. <a href="https://www.benzinga.com/quote/MRK/analyst-ratings">See how other analysts view this stock.</a></li>
<li>Canaccord Genuity raised the price target for Intuitive Machines, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LUNR#NASDAQ">LUNR</a>) from $17.5 to $26. Canaccord Genuity analyst Austin Moeller maintained a Buy rating. Intuitive Machines shares closed at $19.87 on Tuesday. <a href="https://www.benzinga.com/quote/LUNR/analyst-ratings">See how other analysts view this stock.</a></li>
<li>Piper Sandler increased the price target for Autodesk, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ADSK#NASDAQ">ADSK</a>) from $311 to $357. Piper Sandler analyst Clarke Jeffries upgraded the stock from Neutral to Overweight. Autodesk shares closed at $290.82 on Tuesday. See how other analysts view this stock.</li>
<li>B of A Securities boosted Ferguson Enterprises Inc. (NYSE FERG) price target from $185 to $225. B of A Securities analyst Arnaud Lehmann upgraded the stock from Underperform to Buy. Ferguson shares settled at $172.21 on Tuesday. <a href="https://www.benzinga.com/quote/FERG/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>Jefferies raised GE HealthCare Technologies Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/GEHC#NASDAQ">GEHC</a>) price target from $95 to $103. Jefferies analyst Matthew Taylor upgraded the stock from Hold to Buy. GE HealthCare shares closed at $83.37 on Tuesday. <a href="https://www.benzinga.com/quote/GEHC/analyst-ratings">See how other analysts view this stock.</a></li>
<li>Deutsche Bank raised Workday, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/WDAY#NASDAQ">WDAY</a>) price target from $265 to $300. Deutsche Bank analyst Brad Zelnick upgraded the stock from Hold to Buy. Workday shares closed at $249.68 on Tuesday.  <a href="https://www.benzinga.com/quote/WDAY/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>Morgan Stanley boosted the price target for NetEase, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>) from $90 to $108. Morgan Stanley analyst Alex Poon upgraded the stock from Equal-Weight to Overweight. NetEase shares settled at $89.72 on Tuesday. <a href="https://www.benzinga.com/quote/NTES/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>Truist Securities raised Bristol-Myers Squibb Company (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BMY#NYSE">BMY</a>) price target from $62 to $65. Truist Securities analyst Robyn Karnauskas maintained a Buy rating. Bristol-Myers Squibb shares closed at $57.14 on Tuesday. <a href="https://www.benzinga.com/quote/BMY/analyst-ratings">See how other analysts view this stock</a>.</li>
<li>JP Morgan cut MercadoLibre, Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MELI#NASDAQ">MELI</a>) price target from $2,150 to $1,950. JP Morgan analyst Marcelo Santos maintained a Neutral rating. MercadoLibre shares closed at $1,771.22 on Tuesday. <a href="https://www.benzinga.com/quote/MELI/analyst-ratings">See how other analysts view this stock</a>.</li>
</ul>
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Morgan Stanley analyst Alex Poon upgrades NetEase (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>) from Equal-Weight to Overweight and raises the price target from $90 to $108.

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Morgan Stanley Upgrades NetEase to Overweight, Raises Price Target to $108

On Tuesday, Marvel Rivals posted on X (formerly Twitter) that it has hit 20 million players in less than 2 weeks after launch.
Marvel Rivals&nbsp;is a superhero team-based player versus player (PVP) shooter developed by Walt Disney Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIS#NYSE">DIS</a>) Marvel Games and NetEase Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NTES#NASDAQ">NTES</a>) NetEase Games in the Marvel Universe.
On December 9, the video game company said it reached <a href="https://www.benzinga.com/general/gaming/24/12/42397858/marvel-rivals-stuns-with-10-million-players-in-first-weekend" target="_blank" rel="noreferrer noopener">10 million players</a> globally following its launch on PC, PlayStation 5, and Xbox Series X/S.
<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"> 
<div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">&#x1f496; We are thrilled to announce that 20 million players have joined Marvel Rivals! Our gratitude for each of you is immense! &#x1f970;The spray is ready now, and we also included this number in the spray! Thank you for helping us achieve this milestone. &#x23f2;&#xFE0F;Log in from December 20th,… <a href="https://t.co/tr0k6NYZ95">pic.twitter.com/tr0k6NYZ95</a>
&mdash; Marvel Rivals (@MarvelRivals) <a href="https://twitter.com/MarvelRivals/status/1869080172814848471?ref_src=twsrc%5Etfw">December 17, 2024</a></blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script></div>
</figure>
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The game features Marvel Cinematic Universe (MCU) heroes like Iron Man, Hulk, and Scarlet Witch, alongside comic book favorites like Cloak and Dagger, Iron Fist, and Squirrel Girl.
On December 6, Marvel Rivals <a target="_blank" href="https://www.benzinga.com/24/12/42366954/neteases-marvel-rivals-launches-with-444000-players-on-steam" rel="noreferrer noopener">debuted on Steam</a> with 444K players featuring heroes like Iron Man and Wolverine.
The success of the games bears testimony to the popularity of the Marvel superheroes. Disney acquired Marvel in 2009 <a target="_blank" href="https://www.benzinga.com/news/24/08/40157189/deadpool-wolverine-grosses-824m-globally-disney-hits-3b-milestone-report" rel="noreferrer noopener">for $4 billion</a>.
Marvel Studios emerged as the highest-grossing film franchise of all time, crossing the $30 billion mark at the <a target="_blank" href="https://thewaltdisneycompany.com/marvel-studios-30-billion-box-office/" rel="noreferrer noopener">global box office</a> as of July 2024, backed by the massive successes of Avengers: Endgame,&nbsp;Black Panther, Iron Man, and Deadpool &amp; Wolverine.
<a target="_blank" href="https://www.boxofficemojo.com/year/world/?ref_=bo_nb_in_tab" rel="noreferrer noopener">According to</a> Box Office Mojo, Marvel Studios' Deadpool &amp; Wolverine became the second-highest-grossing movie of 2024 ($1.34 billion), trailing only "Inside Out 2" ($1.7 billion).
The popularity of video games prompted Walt Disney and&nbsp;Netflix Inc&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NFLX#NASDAQ">NFLX</a>) to tap&nbsp;the sector's<a target="_blank" href="https://www.benzinga.com/general/gaming/24/09/40802898/netflix-games-hit-210m-downloads-which-game-took-the-no-1-spot" rel="noreferrer noopener"> frenzy</a>.
Walt Disney reported <a target="_blank" href="https://www.benzinga.com/24/11/41971559/disneys-q4-boosted-by-streaming-gains-strong-box-office-and-solid-parks-performance" rel="noreferrer noopener">fiscal fourth-quarter&nbsp;2024</a> revenue growth of 6% to $22.57 billion, beating the&nbsp;consensus estimate of $22.35 billion. Adjusted EPS of $1.14 beat the&nbsp;analyst consensus of $1.10. The stock surged 25% year-to-date.
NetEase reported a <a target="_blank" href="https://www.benzinga.com/news/earnings/24/11/41966622/netease-q3-earnings-top-forecasts-as-cloud-music-grows-gaming-weakens" rel="noreferrer noopener">fiscal third-quarter</a> revenue decline of 3.9% to $3.73 billion, topping the&nbsp;consensus estimate of $3.65 billion. The adjusted EPADS of $1.67 beat the&nbsp;analyst consensus estimate of $1.61. The stock is up over 1% year-to-date.
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Disney's Marvel Rivals Game Hits 20 Million Players, Proves Superhero Power Still Reigns

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