NTES Should I Buy
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NetEase Inc (NTES) is currently not a strong buy for a beginner investor with a long-term strategy. While the company shows some positive catalysts such as hedge fund buying and resilience in its game portfolio, the technical indicators, financial performance, and lack of strong trading signals suggest that it is better to hold off on purchasing at this time.
The technical indicators are bearish. The MACD histogram is negative and contracting, the RSI is neutral at 23.808, and the moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading near its support level of 114.289, with resistance levels at 117.285 and 120.282.
Hedge funds are significantly increasing their positions, with a 133.24% increase in buying over the last quarter. Analysts from Citi have raised the price target to $165, citing the company's resilience and pioneering use of AI in its game portfolio.
Insider trading trends are neutral with no significant activity. The company's Q4 financials show a decline in net income (-27.80% YoY) and EPS (-28.95% YoY). The pre-market price is down 0.80%, and there are no recent news catalysts to drive momentum.
In Q4 2025, revenue increased by 4.42% YoY to $3.89 billion, but net income dropped by 27.80% YoY to $880.42 million. EPS also fell by 28.95% YoY to $0.27. However, gross margin improved by 5.57% YoY to 64.23%.
Barclays lowered the price target to $132 from $135 and maintained an Equal Weight rating. Citi raised the price target to $165 from $161 and maintained a Buy rating, highlighting the company's resilience and innovative use of AI in its game portfolio.
