NetEase Inc.'s stock soared 5.77% in the pre-market trading session on Tuesday, as investors became increasingly optimistic about the company's future growth prospects.
The surge in share price came after recent strong earnings performance, with the company's earnings per share rising 135% over the past three years. This impressive growth has led to a high price-to-earnings (P/E) ratio of 16.5, indicating that investors are willing to pay a premium for the company's shares in anticipation of continued strong earnings growth.
While analysts' forecasts suggest earnings growth of around 11% per year over the next three years, which is in line with the broader market, some investors appear to be even more bullish on NetEase's prospects. However, there are concerns that the current high P/E ratio may not be sustainable if future earnings fail to meet these elevated expectations.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.