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On Thursday, Jefferies increased the price target on NetEase.com (NASDAQ:NTES) shares to $120 from the previous target of $102, while maintaining a Buy rating on the stock. The revision reflects the firm's positive outlook on the company's recent gaming successes.
The stock, currently trading at $103.92, has already delivered an impressive 16.49% return year-to-date. According to InvestingPro analysis, the RSI suggests the stock is in overbought territory, though there may still be room for growth.
The analyst at Jefferies, Thomas Chong, attributed the improved price target to the strong performance of "Marvel Rivals" and "Where Winds Meet." Chong noted that "Marvel Rivals" has shown significant success since its release on December 6, with game grossing reaching approximately $33 million by the end of December.
The game's popularity surged, hitting a peak of over 640,000 concurrent users on January 11, following the launch of the S1 tournament event. This success reflects NetEase's strong market position, with InvestingPro data showing the company maintains a robust financial health score of "GREAT" and an impressive gross profit margin of 62.79%.
The firm's analysis, which includes data from third-party analytics provider Gamalytic, estimates "Marvel Rivals" to achieve an annual grossing of around 3.6 billion RMB across Steam and other platforms. "Where Winds Meet," which released its PC version on December 27 and mobile version on January 9, has also been performing well. The mobile version quickly ranked between 10th and 15th by iOS game grossing.
Jefferies updated its annualized grossing estimates for "Where Winds Meet," expecting the combined PC and mobile versions to reach approximately 4 billion RMB, with each platform contributing about 2 billion RMB. Looking ahead to the rest of 2025, Jefferies forecasts an 8% year-over-year growth in overall gaming revenue for NetEase, with PC games expected to grow at approximately 25% year-over-year.
This positive outlook on NetEase's gaming division is based on the company's ability to capitalize on the popularity of its recent releases and the expected continued growth in the gaming market. NetEase's strategic moves and successful launches have positioned the company for further growth and have been recognized by analysts as a driving force behind the raised price target.
For deeper insights into NetEase's gaming industry position and comprehensive financial analysis, including 10+ additional ProTips and detailed valuation metrics, check out the full company report on InvestingPro.
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