TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TME - US88034P1093 - ADR
16.58 USD
-0.02 (-0.12%)
16.58 USD
0 (0%)
TME gets a fundamental rating of 8 out of 10. The analysis compared the fundamentals against 80 industry peers in the Entertainment industry. TME gets an excellent profitability rating and is at the same time showing great financial health properties. TME has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare combination! These ratings could make TME a good candidate for value and growth and quality investing.
1. Profitability
1.1 Basic Checks
- TME had positive earnings in the past year.
- TME had a positive operating cash flow in the past year.
- Each year in the past 5 years TME has been profitable.
- Each year in the past 5 years TME had a positive operating cash flow.
1.2 Ratios
- With an excellent Return On Assets value of 11.95%, TME belongs to the best of the industry, outperforming 91.25% of the companies in the same industry.
- The Return On Equity of TME (15.93%) is better than 86.25% 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 87.50% of the companies in the same industry.
- Measured over the past 3 years, the Average Return On Invested Capital for TME is below the industry average of 8.70%.
- 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
- With an excellent Profit Margin value of 34.08%, TME belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
- TME's Profit Margin has improved in the last couple of years.
- The Operating Margin of TME (28.82%) is better than 96.25% of its industry peers.
- TME's Operating Margin has improved in the last couple of years.
- Looking at the Gross Margin, with a value of 43.90%, TME is in line with its industry, outperforming 51.25% of the companies in the same industry.
- TME's Gross Margin has improved in the last couple of years.
| 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
- TME has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, TME has less shares outstanding
- The number of shares outstanding for TME has been reduced compared to 5 years ago.
- TME has a better debt/assets ratio than last year.
2.2 Solvency
- TME has an Altman-Z score of 6.27. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
- With an excellent Altman-Z score value of 6.27, TME belongs to the best of the industry, outperforming 88.75% of the companies in the same industry.
- The Debt to FCF ratio of TME is 0.59, which is an excellent value as it means it would take TME, only 0.59 years of fcf income to pay off all of its debts.
- TME has a Debt to FCF ratio of 0.59. This is amongst the best in the industry. TME outperforms 87.50% 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.
- TME has a Debt to Equity ratio of 0.06. This is in the better half of the industry: TME outperforms 66.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 6.27 |
ROIC/WACC1.14
WACC9.13%
2.3 Liquidity
- A Current Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
- The Current ratio of TME (2.09) is better than 76.25% of its industry peers.
- TME has a Quick Ratio of 2.09. This indicates that TME is financially healthy and has no problem in meeting its short term obligations.
- TME's Quick ratio of 2.09 is fine compared to the rest of the industry. TME outperforms 76.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.09 | ||
| Quick Ratio | 2.09 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an impressive 36.04% over the past year.
- Measured over the past years, TME shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.88% on average per year.
- 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
- Based on estimates for the next years, TME will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.91% on average per year.
- The Revenue is expected to grow by 14.77% on average over the next years. This is quite good.
EPS Next Y22.26%
EPS Next 2Y18.33%
EPS Next 3Y16.43%
EPS Next 5Y16.91%
Revenue Next Year15.3%
Revenue Next 2Y14.22%
Revenue Next 3Y13.71%
Revenue Next 5Y14.77%
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
- The Price/Earnings ratio is 19.06, which indicates a rather expensive current valuation of TME.
- Based on the Price/Earnings ratio, TME is valued cheaper than 81.25% of the companies in the same industry.
- TME's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.38.
- A Price/Forward Earnings ratio of 16.81 indicates a correct valuation of TME.
- TME's Price/Forward Earnings ratio is rather cheap when compared to the industry. TME is cheaper than 85.00% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.29, TME is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.06 | ||
| Fwd PE | 16.81 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, TME is valued a bit cheaper than the industry average as 70.00% of the companies are valued more expensively.
- TME's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TME is cheaper than 90.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 17.25 | ||
| EV/EBITDA | 14.12 |
4.3 Compensation for Growth
- TME's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- TME has an outstanding profitability rating, which may justify a higher PE ratio.
- TME's earnings are expected to grow with 16.43% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.86
PEG (5Y)1.75
EPS Next 2Y18.33%
EPS Next 3Y16.43%
5. Dividend
5.1 Amount
- TME has a Yearly Dividend Yield of 1.85%.
- The stock price of TME dropped by -25.85% 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.
- Compared to an average industry Dividend Yield of 7.66, TME pays a better dividend. On top of this TME pays more dividend than 88.75% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.85, TME has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.85% |
5.2 History
- TME is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
DPN/A
EPS Next 2Y18.33%
EPS Next 3Y16.43%
16.58
-0.02 (-0.12%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)11-12 2025-11-12/bmo
Earnings (Next)03-16 2026-03-16/amc
Inst Owners62.89%
Inst Owner Change0.15%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap25.55B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.22 (58.14%)
Short Float %4.01%
Short Ratio2.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.85% |
Yearly Dividend0.13
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
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)-0.67%
PT rev (3m)-6.38%
EPS NQ rev (1m)0.11%
EPS NQ rev (3m)-0.32%
EPS NY rev (1m)0.16%
EPS NY rev (3m)3.61%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.78%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.06 | ||
| Fwd PE | 16.81 | ||
| P/S | 5.61 | ||
| P/FCF | 17.25 | ||
| P/OCF | 17.25 | ||
| P/B | 2.62 | ||
| P/tB | 3.86 | ||
| EV/EBITDA | 14.12 |
EPS(TTM)0.87
EY5.25%
EPS(NY)0.99
Fwd EY5.95%
FCF(TTM)0.96
FCFY5.8%
OCF(TTM)0.96
OCFY5.8%
SpS2.95
BVpS6.32
TBVpS4.3
PEG (NY)0.86
PEG (5Y)1.75
Graham Number11.12
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 | 6.27 |
F-Score5
WACC9.13%
ROIC/WACC1.14
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 Y22.26%
EPS Next 2Y18.33%
EPS Next 3Y16.43%
EPS Next 5Y16.91%
Revenue 1Y (TTM)13.95%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%20.64%
Revenue Next Year15.3%
Revenue Next 2Y14.22%
Revenue Next 3Y13.71%
Revenue Next 5Y14.77%
EBIT growth 1Y37.58%
EBIT growth 3Y39.33%
EBIT growth 5Y13.34%
EBIT Next Year51.35%
EBIT Next 3Y23.15%
EBIT Next 5Y22.61%
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 8 / 10 to TME.
What is the valuation status of TENCENT MUSIC ENTERTAINM-ADR (TME) stock?
ChartMill assigns a valuation rating of 7 / 10 to TENCENT MUSIC ENTERTAINM-ADR (TME). This can be considered as Undervalued.
How profitable is TENCENT MUSIC ENTERTAINM-ADR (TME) stock?
TENCENT MUSIC ENTERTAINM-ADR (TME) has a profitability rating of 8 / 10.
What are the PE and PB ratios of TENCENT MUSIC ENTERTAINM-ADR (TME) stock?
The Price/Earnings (PE) ratio for TENCENT MUSIC ENTERTAINM-ADR (TME) is 19.06 and the Price/Book (PB) ratio is 2.62.
What is the expected EPS growth for TENCENT MUSIC ENTERTAINM-ADR (TME) stock?
The Earnings per Share (EPS) of TENCENT MUSIC ENTERTAINM-ADR (TME) is expected to grow by 22.26% in the next year.