TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TME - US88034P1093 - ADR
18.38 USD
-0.21 (-1.13%)
18.43 USD
+0.05 (+0.27%)
Taking everything into account, TME scores 7 out of 10 in our fundamental rating. TME was compared to 80 industry peers in the Entertainment industry. TME has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. TME is not overvalued while it is showing excellent growth. This is an interesting combination. With these ratings, TME could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
In the past year TME was profitable.
TME had a positive operating cash flow in the past year.
TME had positive earnings in each of the past 5 years.
In the past 5 years TME always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of TME (11.95%) is better than 90.00% of its industry peers.
TME has a Return On Equity of 15.93%. This is amongst the best in the industry. TME outperforms 85.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 10.39%, TME belongs to the top of the industry, outperforming 86.25% of the companies in the same industry.
TME had an Average Return On Invested Capital over the past 3 years of 6.52%. This is below the industry average of 9.08%.
The last Return On Invested Capital (10.39%) for TME is above the 3 year average (6.52%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.95% | ||
| ROE | 15.93% | ||
| ROIC | 10.39% |
ROA(3y)6.45%
ROA(5y)5.99%
ROE(3y)8.75%
ROE(5y)8.04%
ROIC(3y)6.52%
ROIC(5y)5.78%
1.3 Margins
TME's Profit Margin of 34.08% is amongst the best of the industry. TME outperforms 100.00% of its industry peers.
TME's Profit Margin has improved in the last couple of years.
TME's Operating Margin of 28.82% is amongst the best of the industry. TME outperforms 96.25% of its industry peers.
TME's Operating Margin has improved in the last couple of years.
TME has a Gross Margin (43.90%) which is in line with its industry peers.
In the last couple of years the Gross Margin of TME has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.82% | ||
| PM (TTM) | 34.08% | ||
| GM | 43.9% |
OM growth 3Y43.83%
OM growth 5Y10.87%
PM growth 3Y34.13%
PM growth 5Y8.36%
GM growth 3Y12.05%
GM growth 5Y4.42%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TME is still creating some value.
The number of shares outstanding for TME has been reduced compared to 1 year ago.
Compared to 5 years ago, TME has less shares outstanding
TME has a better debt/assets ratio than last year.
2.2 Solvency
TME has an Altman-Z score of 6.86. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
TME has a Altman-Z score of 6.86. This is amongst the best in the industry. TME outperforms 85.00% of its industry peers.
TME has a debt to FCF ratio of 0.59. This is a very positive value and a sign of high solvency as it would only need 0.59 years to pay back of all of its debts.
The Debt to FCF ratio of TME (0.59) is better than 86.25% of its industry peers.
TME has a Debt/Equity ratio of 0.06. This is a healthy value indicating a solid balance between debt and equity.
With a decent Debt to Equity ratio value of 0.06, TME is doing good in the industry, outperforming 65.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 6.86 |
ROIC/WACC1.44
WACC7.23%
2.3 Liquidity
TME has a Current Ratio of 2.09. This indicates that TME is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of TME (2.09) is better than 78.75% of its industry peers.
A Quick Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.09, TME is in the better half of the industry, outperforming 78.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.09 | ||
| Quick Ratio | 2.09 |
3. Growth
3.1 Past
TME shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.04%, which is quite impressive.
TME shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.88% yearly.
The Revenue has grown by 13.95% in the past year. This is quite good.
Measured over the past years, TME shows a small growth in Revenue. The Revenue has been growing by 2.23% on average per year.
EPS 1Y (TTM)36.04%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%32.76%
Revenue 1Y (TTM)13.95%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%20.64%
3.2 Future
The Earnings Per Share is expected to grow by 17.33% on average over the next years. This is quite good.
The Revenue is expected to grow by 15.04% on average over the next years. This is quite good.
EPS Next Y22.07%
EPS Next 2Y18.38%
EPS Next 3Y16.42%
EPS Next 5Y17.33%
Revenue Next Year15.25%
Revenue Next 2Y14.16%
Revenue Next 3Y13.7%
Revenue Next 5Y15.04%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 21.37, TME is valued on the expensive side.
Based on the Price/Earnings ratio, TME is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of TME to the average of the S&P500 Index (26.28), we can say TME is valued inline with the index average.
A Price/Forward Earnings ratio of 18.87 indicates a rather expensive valuation of TME.
Based on the Price/Forward Earnings ratio, TME is valued cheaper than 85.00% of the companies in the same industry.
TME's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 23.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.37 | ||
| Fwd PE | 18.87 |
4.2 Price Multiples
63.75% of the companies in the same industry are more expensive than TME, based on the Enterprise Value to EBITDA ratio.
TME's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TME is cheaper than 85.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.39 | ||
| EV/EBITDA | 16.29 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of TME may justify a higher PE ratio.
TME's earnings are expected to grow with 16.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.97
PEG (5Y)1.96
EPS Next 2Y18.38%
EPS Next 3Y16.42%
5. Dividend
5.1 Amount
TME has a Yearly Dividend Yield of 1.64%.
The stock price of TME dropped by -26.48% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
TME's Dividend Yield is rather good when compared to the industry average which is at 34.07. TME pays more dividend than 88.75% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.31, TME is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
5.2 History
TME does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
DPN/A
EPS Next 2Y18.38%
EPS Next 3Y16.42%
18.38
-0.21 (-1.13%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners62.48%
Inst Owner Change-5.65%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap28.32B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.39 (43.58%)
Short Float %3.66%
Short Ratio2.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
Yearly Dividend0.13
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years1
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)6.17%
Min EPS beat(2)0.1%
Max EPS beat(2)12.25%
EPS beat(4)4
Avg EPS beat(4)6.78%
Min EPS beat(4)0.1%
Max EPS beat(4)12.53%
EPS beat(8)7
Avg EPS beat(8)3.77%
EPS beat(12)10
Avg EPS beat(12)3.33%
EPS beat(16)13
Avg EPS beat(16)4.55%
Revenue beat(2)2
Avg Revenue beat(2)3.43%
Min Revenue beat(2)1.88%
Max Revenue beat(2)4.97%
Revenue beat(4)4
Avg Revenue beat(4)2.05%
Min Revenue beat(4)0.15%
Max Revenue beat(4)4.97%
Revenue beat(8)6
Avg Revenue beat(8)1.12%
Revenue beat(12)9
Avg Revenue beat(12)1.03%
Revenue beat(16)11
Avg Revenue beat(16)1.05%
PT rev (1m)-5.46%
PT rev (3m)-1.35%
EPS NQ rev (1m)-0.43%
EPS NQ rev (3m)-0.43%
EPS NY rev (1m)3.11%
EPS NY rev (3m)3.51%
Revenue NQ rev (1m)0.58%
Revenue NQ rev (3m)0.78%
Revenue NY rev (1m)0.77%
Revenue NY rev (3m)0.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.37 | ||
| Fwd PE | 18.87 | ||
| P/S | 6.31 | ||
| P/FCF | 19.39 | ||
| P/OCF | 19.39 | ||
| P/B | 2.95 | ||
| P/tB | 4.33 | ||
| EV/EBITDA | 16.29 |
EPS(TTM)0.86
EY4.68%
EPS(NY)0.97
Fwd EY5.3%
FCF(TTM)0.95
FCFY5.16%
OCF(TTM)0.95
OCFY5.16%
SpS2.91
BVpS6.23
TBVpS4.24
PEG (NY)0.97
PEG (5Y)1.96
Graham Number10.98
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.95% | ||
| ROE | 15.93% | ||
| ROCE | 12.37% | ||
| ROIC | 10.39% | ||
| ROICexc | 16.44% | ||
| ROICexgc | 30.72% | ||
| OM | 28.82% | ||
| PM (TTM) | 34.08% | ||
| GM | 43.9% | ||
| FCFM | 32.54% |
ROA(3y)6.45%
ROA(5y)5.99%
ROE(3y)8.75%
ROE(5y)8.04%
ROIC(3y)6.52%
ROIC(5y)5.78%
ROICexc(3y)9.52%
ROICexc(5y)8.88%
ROICexgc(3y)19.59%
ROICexgc(5y)19.68%
ROCE(3y)7.76%
ROCE(5y)6.88%
ROICexgc growth 3Y16.02%
ROICexgc growth 5Y-26.04%
ROICexc growth 3Y28.21%
ROICexc growth 5Y-2.74%
OM growth 3Y43.83%
OM growth 5Y10.87%
PM growth 3Y34.13%
PM growth 5Y8.36%
GM growth 3Y12.05%
GM growth 5Y4.42%
F-Score5
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Debt/EBITDA | 0.37 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 101.98% | ||
| Profit Quality | 95.47% | ||
| Current Ratio | 2.09 | ||
| Quick Ratio | 2.09 | ||
| Altman-Z | 6.86 |
F-Score5
WACC7.23%
ROIC/WACC1.44
Cap/Depr(3y)104.08%
Cap/Depr(5y)129.71%
Cap/Sales(3y)3.85%
Cap/Sales(5y)4.42%
Profit Quality(3y)146.47%
Profit Quality(5y)125.36%
High Growth Momentum
Growth
EPS 1Y (TTM)36.04%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%32.76%
EPS Next Y22.07%
EPS Next 2Y18.38%
EPS Next 3Y16.42%
EPS Next 5Y17.33%
Revenue 1Y (TTM)13.95%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%20.64%
Revenue Next Year15.25%
Revenue Next 2Y14.16%
Revenue Next 3Y13.7%
Revenue Next 5Y15.04%
EBIT growth 1Y37.58%
EBIT growth 3Y39.33%
EBIT growth 5Y13.34%
EBIT Next Year51.37%
EBIT Next 3Y23.22%
EBIT Next 5Y22.9%
FCF growth 1Y31.4%
FCF growth 3Y55.02%
FCF growth 5Y9.34%
OCF growth 1Y31.4%
OCF growth 3Y25.17%
OCF growth 5Y10.63%
TENCENT MUSIC ENTERTAINM-ADR / TME FAQ
What is the fundamental rating for TME stock?
ChartMill assigns a fundamental rating of 7 / 10 to TME.
Can you provide the valuation status for TENCENT MUSIC ENTERTAINM-ADR?
ChartMill assigns a valuation rating of 6 / 10 to TENCENT MUSIC ENTERTAINM-ADR (TME). This can be considered as Fairly Valued.
How profitable is TENCENT MUSIC ENTERTAINM-ADR (TME) stock?
TENCENT MUSIC ENTERTAINM-ADR (TME) has a profitability rating of 8 / 10.
What is the earnings growth outlook for TENCENT MUSIC ENTERTAINM-ADR?
The Earnings per Share (EPS) of TENCENT MUSIC ENTERTAINM-ADR (TME) is expected to grow by 22.07% in the next year.