TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TME - US88034P1093 - ADR
16.08 USD
-0.13 (-0.8%)
16.08 USD
0 (0%)
Taking everything into account, TME scores 8 out of 10 in our fundamental rating. TME was compared to 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. An interesting combination arises when we look at growth and value: TME is growing strongly while it also seems undervalued. 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.
- Each year in the past 5 years TME had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of TME (11.95%) is better than 91.25% of its industry peers.
- With an excellent Return On Equity value of 15.93%, TME belongs to the best of the industry, outperforming 86.25% of the companies in the same industry.
- TME has a Return On Invested Capital of 10.39%. This is amongst the best in the industry. TME outperforms 87.50% of its industry peers.
- The Average Return On Invested Capital over the past 3 years 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.
- In the last couple of years the Profit Margin of TME has grown nicely.
- 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.
- TME's Gross Margin of 43.90% is in line compared to the rest of the industry. TME outperforms 51.25% of 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
- 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.
- TME has a better debt/assets ratio than last year.
2.2 Solvency
- An Altman-Z score of 6.16 indicates that TME is not in any danger for bankruptcy at the moment.
- TME has a better Altman-Z score (6.16) than 86.25% 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.
- The Debt to FCF ratio of TME (0.59) is better than 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.
- 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 | 6.16 |
ROIC/WACC1.12
WACC9.3%
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.
- TME's Current ratio of 2.09 is fine compared to the rest of the industry. TME outperforms 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.
- TME has a better Quick ratio (2.09) than 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.
- TME shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.88% yearly.
- TME shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.95%.
- 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
- A Price/Earnings ratio of 18.48 indicates a rather expensive valuation of TME.
- 81.25% of the companies in the same industry are more expensive than TME, based on the Price/Earnings ratio.
- Compared to an average S&P500 Price/Earnings ratio of 26.94, TME is valued a bit cheaper.
- A Price/Forward Earnings ratio of 16.28 indicates a correct valuation of TME.
- 86.25% of the companies in the same industry are more expensive than TME, based on the Price/Forward Earnings ratio.
- The average S&P500 Price/Forward Earnings ratio is at 23.94. TME is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.48 | ||
| Fwd PE | 16.28 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TME indicates a somewhat cheap valuation: TME is cheaper than 70.00% of the companies listed in the same industry.
- 90.00% of the companies in the same industry are more expensive than TME, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.71 | ||
| EV/EBITDA | 13.7 |
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)0.83
PEG (5Y)1.7
EPS Next 2Y18.33%
EPS Next 3Y16.43%
5. Dividend
5.1 Amount
- TME has a Yearly Dividend Yield of 1.85%.
- In the last 3 months the price of TME has falen by -29.78%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- 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.
- TME's Dividend Yield is comparable with the S&P500 average which is at 1.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.85% |
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%
16.08
-0.13 (-0.8%)
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 Cap24.78B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.22 (63.06%)
Short Float %5.15%
Short Ratio3.09
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 | 18.48 | ||
| Fwd PE | 16.28 | ||
| P/S | 5.44 | ||
| P/FCF | 16.71 | ||
| P/OCF | 16.71 | ||
| P/B | 2.54 | ||
| P/tB | 3.73 | ||
| EV/EBITDA | 13.7 |
EPS(TTM)0.87
EY5.41%
EPS(NY)0.99
Fwd EY6.14%
FCF(TTM)0.96
FCFY5.99%
OCF(TTM)0.96
OCFY5.99%
SpS2.96
BVpS6.33
TBVpS4.31
PEG (NY)0.83
PEG (5Y)1.7
Graham Number11.13
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 | 6.16 |
F-Score5
WACC9.3%
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 Year15.3%
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 18.48 and the Price/Book (PB) ratio is 2.54.
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.