Shares of NetEase (NASDAQ:NTES) slid in pre-market trading even though the Chinese gaming company announced mixed Q1 results. The company reported adjusted earnings for its first quarter of RMB13.10 ($1.81) per diluted American Depository Share (ADS), compared to RMB11.62 in the same period last year. This was above consensus estimates of earnings of $1.76 per share.
The company generated revenues of RMB26.9 billion ($3.7 billion) in the first quarter, an increase of 7.2% year-over-year. Analysts were expecting NTES to post revenues of $3.76 billion.
NetEase’s Stock Buyback Program and Dividend
Additionally, the company’s Board of Directors approved a dividend of $0.099 per share ($0.495 per ADS) for the first quarter of 2024 to holders of ordinary shares and holders of ADS. NTES expects to pay the dividend on June 17 for holders of ordinary shares and on or around June 21 for holders of ADSs.
For the fourth quarter of FY23, NTES paid a dividend of $0.21597 per share ($1.07985 per ADS) in March 2024.
Moreover, at the end of the first quarter, the company had repurchased around 8.9 million ADSs for a total cost of $811 million. This was part of NetEase’s stock buyback program announced in 2022 of repurchasing up to $5.0 billion of the company’s ADSs and ordinary shares.
Is NTES a Good Stock to Buy?
Analysts remain bullish about NTES stock, with a Strong Buy consensus rating based on 11 Buys and one Hold. Over the past year, NTES has increased by more than 15%, and the average NTES price target of $133.46 implies an upside potential of 35.7% from current levels. These analyst ratings are likely to change following NTES’s Q1 results today.
