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NetEase (NTES) to Report Q4 Earnings: What's in the Offing?

NetEase NTES is set to report fourth-quarter 2023 results on Feb 29.

The Zacks Consensus Estimate for fourth-quarter revenues currently stands at $3.96 billion, suggesting an increase of 7.6% from the figure reported in the year-ago quarter.

The consensus mark for earnings has moved downward by 3 cents to $1.80 per share over the past 60 days, indicating a 68.2% increase from the year-ago quarter’s reported figure.

The company’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 16.6%.

Let’s see how things have shaped up for this announcement.

NetEase, Inc. Price and EPS Surprise

NetEase, Inc. price-eps-surprise | NetEase, Inc. Quote

Factors to Consider

NetEase’s diversified online gaming portfolio is expected to have been a major contributor to the top line in the to-be-reported quarter.

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NetEase’s expanding gaming portfolio in 2023, including The Lord of the Rings: Rise to War, Harry Potter: Magic Awakened, Identity V, Justice Online Mobile, In???nite Borders, NARAKA: BLADEPOINT, Ace Racer, Once Human and Vikingard, is expected to have driven user growth and contributed to the company’s top line in the soon-to-be-reported quarter.

Further, NTES’ expanded international presence through strategic mergers and acquisitions and the opening of new internal studios across Japan, Europe and North America is likely to have boosted its fourth-quarter top line.

Additionally, the company focuses on dynamic, premium content across its family of apps because it attracts people and keeps them attached. Its music business is likely to have continued to benefit from this focus, thereby making strong contributions in the to-be-reported quarter. Its Youdao business is anticipated to have also done well during the fourth quarter, driven by the company’s sustained focus on adding fresh content.

However, increasing government regulations related to gaming and stiff competition from Tencent are expected to have negatively impacted the top line.

What Our Model Says

Our proven model does not conclusively predict an earnings beat for NetEase this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

Though NTES currently carries a Zacks Rank of 3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable Combination

Per our model, SEMrush SEMR, Guidewire Software GWRE and JD.com JD have the right combination of elements to post an earnings beat in their upcoming releases.

SEMrush carries a Zacks Rank #2 and has an Earnings ESP of +23.08%. The company is scheduled to report fourth-quarter 2023 results on Mar 4. Its bottom-line result surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 112.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for SEMrush’s fourth-quarter bottom line is pegged at earnings of 3 cents per share, indicating a robust improvement from the year-ago quarter’s loss of 8 cents. The consensus mark for revenues stands at $83.2 million, calling for a year-over-year increase of 20.9%.

Guidewire Software is slated to report second-quarter fiscal 2024 results on Mar 7. The company has a Zacks Rank #3 and an Earnings ESP of +4.76% at present. Guidewire Software’s earnings beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being -42.22%.

The Zacks Consensus Estimate for second-quarter earnings is pegged at 21 cents per share, suggesting a strong improvement from the year-ago quarter’s loss of 21 cents. Guidewire Software’s quarterly revenues are estimated to improve 3.6% to $240.9 million.

JD.com carries a Zacks Rank #3 and has an Earnings ESP of +0.78%. The company is scheduled to report fourth-quarter 2023 results on Mar 6. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, with the average surprise being 14.5%.

The Zacks Consensus Estimate for JD.com’s fourth-quarter earnings stands at 65 cents per share, indicating a year-over-year decline of 7.1%. It is estimated to report revenues of $42.56 billion, which implies a decrease of approximately 0.7% from the year-ago quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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NetEase, Inc. (NTES) : Free Stock Analysis Report

Guidewire Software, Inc. (GWRE) : Free Stock Analysis Report

JD.com, Inc. (JD) : Free Stock Analysis Report

SEMrush Holdings, Inc. (SEMR) : Free Stock Analysis Report

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