TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TME - US88034P1093 - ADR
17.35 USD
-0.14 (-0.8%)
17.38 USD
+0.03 (+0.17%)
Overall TME gets a fundamental rating of 8 out of 10. We evaluated TME against 80 industry peers in the Entertainment industry. TME scores excellent points on both the profitability and health parts. This is a solid base for a good stock. TME is evaluated to be cheap and growing strongly. This does not happen too often! With these ratings, TME could be worth investigating further for value and 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.
TME had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
TME has a better Return On Assets (11.95%) than 91.25% of its industry peers.
TME's Return On Equity of 15.93% is amongst the best of the industry. TME outperforms 86.25% of its industry peers.
With an excellent Return On Invested Capital value of 10.39%, TME belongs to the best of the industry, outperforming 87.50% 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 8.70%.
The 3 year average ROIC (6.52%) for TME is below the current ROIC(10.39%), indicating increased profibility in the last year.
| 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 has a Profit Margin of 34.08%. This is amongst the best in the industry. TME outperforms 100.00% of its industry peers.
In the last couple of years the Profit Margin of TME has grown nicely.
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 of 43.90%. This is comparable to the rest of the industry: TME outperforms 51.25% of its industry peers.
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TME is still creating some value.
TME has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, TME has less shares outstanding
Compared to 1 year ago, TME has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 6.50 indicates that TME is not in any danger for bankruptcy at the moment.
TME has a better Altman-Z score (6.50) than 87.50% of its industry peers.
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.
A Debt/Equity ratio of 0.06 indicates that TME is not too dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.06, TME is in the better half of the industry, outperforming 66.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 6.5 |
ROIC/WACC1.12
WACC9.27%
2.3 Liquidity
A Current Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
TME has a better Current ratio (2.09) 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 has a Quick ratio of 2.09. This is in the better half 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
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.
The Earnings Per Share has been growing by 10.88% on average over the past years. This is quite good.
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.
TME is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.77% yearly.
EPS Next Y22.26%
EPS Next 2Y18.33%
EPS Next 3Y16.43%
EPS Next 5Y16.91%
Revenue Next Year15.28%
Revenue Next 2Y14.16%
Revenue Next 3Y13.65%
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 19.94, which indicates a rather expensive current valuation of TME.
Based on the Price/Earnings ratio, TME is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
TME's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.19.
Based on the Price/Forward Earnings ratio of 17.62, the valuation of TME can be described as rather expensive.
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.
The average S&P500 Price/Forward Earnings ratio is at 23.92. TME is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.94 | ||
| Fwd PE | 17.62 |
4.2 Price Multiples
TME's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TME is cheaper than 68.75% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TME indicates a rather cheap valuation: TME is cheaper than 86.25% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.09 | ||
| EV/EBITDA | 14.97 |
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 16.43% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.9
PEG (5Y)1.83
EPS Next 2Y18.33%
EPS Next 3Y16.43%
5. Dividend
5.1 Amount
TME has a Yearly Dividend Yield of 1.76%.
In the last 3 months the price of TME has falen by -22.65%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
TME's Dividend Yield is rather good when compared to the industry average which is at 8.69. TME pays more dividend than 88.75% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.92, TME has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.76% |
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 2Y18.33%
EPS Next 3Y16.43%
17.35
-0.14 (-0.8%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners62.89%
Inst Owner Change0.08%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap26.73B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.39 (52.1%)
Short Float %4.01%
Short Ratio2.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.76% |
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%
PT rev (3m)-5.76%
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)0.02%
Revenue NY rev (3m)0.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.94 | ||
| Fwd PE | 17.62 | ||
| P/S | 5.89 | ||
| P/FCF | 18.09 | ||
| P/OCF | 18.09 | ||
| P/B | 2.75 | ||
| P/tB | 4.04 | ||
| EV/EBITDA | 14.97 |
EPS(TTM)0.87
EY5.01%
EPS(NY)0.98
Fwd EY5.68%
FCF(TTM)0.96
FCFY5.53%
OCF(TTM)0.96
OCFY5.53%
SpS2.95
BVpS6.31
TBVpS4.29
PEG (NY)0.9
PEG (5Y)1.83
Graham Number11.11
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 | 6.5 |
F-Score5
WACC9.27%
ROIC/WACC1.12
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 Year15.28%
Revenue Next 2Y14.16%
Revenue Next 3Y13.65%
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 19.94 and the Price/Book (PB) ratio is 2.75.
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.