TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TME - US88034P1093 - ADR
18.22 USD
+0.02 (+0.11%)
18.17 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 priced too expensively while it is growing strongly. Keep and eye on this one! These ratings would make TME suitable for 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
TME has a Return On Assets of 11.95%. This is amongst the best in the industry. TME outperforms 91.25% of its industry peers.
The Return On Equity of TME (15.93%) is better than 86.25% of its industry peers.
TME has a better Return On Invested Capital (10.39%) than 87.50% of its industry peers.
TME had an Average Return On Invested Capital over the past 3 years of 6.52%. This is below the industry average of 8.91%.
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
Looking at the Profit Margin, with a value of 34.08%, TME belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
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.
In the last couple of years the Operating Margin of TME has grown nicely.
The Gross Margin of TME (43.90%) is comparable to the rest of the industry.
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
TME has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
TME has less shares outstanding than it did 1 year ago.
The number of shares outstanding for TME has been reduced compared to 5 years ago.
Compared to 1 year ago, TME has an improved debt to assets ratio.
2.2 Solvency
TME has an Altman-Z score of 6.80. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.80, TME belongs to the top of the industry, outperforming 86.25% 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.
With an excellent Debt to FCF ratio value of 0.59, TME belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
TME has a Debt/Equity ratio of 0.06. This is a healthy value indicating a solid balance between debt and equity.
The Debt to Equity ratio of TME (0.06) is better than 65.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 6.8 |
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 76.25% of its industry peers.
A Quick Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
With a decent Quick ratio value of 2.09, TME is doing good in the industry, outperforming 76.25% of the companies in the same industry.
| 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.
The Earnings Per Share has been growing by 10.88% on average over the past years. This is quite good.
Looking at the last year, TME shows a quite strong growth in Revenue. The Revenue has grown by 13.95% in the last year.
The Revenue has been growing slightly by 2.23% on average over the past years.
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 17.33% on average per year.
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
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 21.19 indicates a rather expensive valuation of TME.
Compared to the rest of the industry, the Price/Earnings ratio of TME indicates a somewhat cheap valuation: TME is cheaper than 80.00% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.56, TME is valued a bit cheaper.
Based on the Price/Forward Earnings ratio of 18.68, the valuation of TME can be described as rather expensive.
Based on the Price/Forward Earnings ratio, TME is valued cheaply inside the industry as 85.00% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of TME to the average of the S&P500 Index (23.79), we can say TME is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.19 | ||
| Fwd PE | 18.68 |
4.2 Price Multiples
TME's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TME is cheaper than 66.25% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TME is valued cheaper than 86.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.19 | ||
| EV/EBITDA | 16.09 |
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 16.42% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.96
PEG (5Y)1.95
EPS Next 2Y18.38%
EPS Next 3Y16.42%
5. Dividend
5.1 Amount
TME has a Yearly Dividend Yield of 1.69%. Purely for dividend investing, there may be better candidates out there.
The stock price of TME dropped by -27.12% 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 7.71. TME pays more dividend than 88.75% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.87, TME has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.69% |
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 2Y18.38%
EPS Next 3Y16.42%
18.22
+0.02 (+0.11%)
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 Cap28.08B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.39 (44.84%)
Short Float %3.66%
Short Ratio2.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.69% |
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)-4.54%
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)0.81%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.19 | ||
| Fwd PE | 18.68 | ||
| P/S | 6.24 | ||
| P/FCF | 19.19 | ||
| P/OCF | 19.19 | ||
| P/B | 2.92 | ||
| P/tB | 4.29 | ||
| EV/EBITDA | 16.09 |
EPS(TTM)0.86
EY4.72%
EPS(NY)0.98
Fwd EY5.35%
FCF(TTM)0.95
FCFY5.21%
OCF(TTM)0.95
OCFY5.21%
SpS2.92
BVpS6.24
TBVpS4.25
PEG (NY)0.96
PEG (5Y)1.95
Graham Number10.99
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 | 6.8 |
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.