TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - NYSE:TME - US88034P1093 - ADR
18.73 USD
+0.03 (+0.16%)
18.73 USD
0 (0%)
Overall TME gets a fundamental rating of 7 out of 10. We evaluated TME against 79 industry peers in the Entertainment industry. Both the health and profitability get an excellent rating, making TME a very profitable company, without any liquidiy or solvency issues. TME is not overvalued while it is showing excellent growth. This is an interesting combination. 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.
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
TME has a Return On Assets of 11.95%. This is amongst the best in the industry. TME outperforms 89.87% of its industry peers.
The Return On Equity of TME (15.93%) is better than 84.81% 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 84.81% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TME is below the industry average of 9.82%.
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
The Profit Margin of TME (34.08%) is better than 100.00% of its industry peers.
TME's Profit Margin has improved in the last couple of years.
TME has a better Operating Margin (28.82%) than 96.20% 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 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
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.
TME has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, TME has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 6.99 indicates that TME is not in any danger for bankruptcy at the moment.
TME has a better Altman-Z score (6.99) than 91.14% 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.
TME's Debt to FCF ratio of 0.59 is amongst the best of the industry. TME outperforms 86.08% 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 64.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 6.99 |
ROIC/WACC1.49
WACC6.96%
2.3 Liquidity
A Current Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
With a decent Current ratio value of 2.09, TME is doing good in the industry, outperforming 79.75% of the companies in the same industry.
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 79.75% 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.
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 17.10% on average per year.
Based on estimates for the next years, TME will show a quite strong growth in Revenue. The Revenue will grow by 15.18% on average per year.
EPS Next Y18.39%
EPS Next 2Y18.52%
EPS Next 3Y17.39%
EPS Next 5Y17.1%
Revenue Next Year14.37%
Revenue Next 2Y14.34%
Revenue Next 3Y13.42%
Revenue Next 5Y15.18%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 22.04, which indicates a rather expensive current 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 79.75% of the companies listed in the same industry.
TME's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.47.
A Price/Forward Earnings ratio of 19.31 indicates a rather expensive valuation of TME.
82.28% of the companies in the same industry are more expensive than TME, based on the Price/Forward Earnings ratio.
TME is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 35.42, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.04 | ||
| Fwd PE | 19.31 |
4.2 Price Multiples
TME's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TME is cheaper than 62.03% of the companies in the same industry.
TME's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TME is cheaper than 81.01% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.89 | ||
| EV/EBITDA | 16.8 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of TME may justify a higher PE ratio.
A more expensive valuation may be justified as TME's earnings are expected to grow with 17.39% in the coming years.
PEG (NY)1.2
PEG (5Y)2.03
EPS Next 2Y18.52%
EPS Next 3Y17.39%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.64%, TME has a reasonable but not impressive dividend return.
In the last 3 months the price of TME has falen by -26.11%. 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 41.59. TME pays more dividend than 88.61% of the companies in the same industry.
TME's Dividend Yield is slightly below the S&P500 average, which is at 2.44.
| 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 2Y18.52%
EPS Next 3Y17.39%
18.73
+0.03 (+0.16%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners67.61%
Inst Owner Change-5.5%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap28.86B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.72 (42.66%)
Short Float %4.39%
Short Ratio2.53
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)-0.31%
PT rev (3m)42.03%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.74%
EPS NY rev (1m)0.33%
EPS NY rev (3m)4.51%
Revenue NQ rev (1m)0.2%
Revenue NQ rev (3m)2.3%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)3.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.04 | ||
| Fwd PE | 19.31 | ||
| P/S | 6.47 | ||
| P/FCF | 19.89 | ||
| P/OCF | 19.89 | ||
| P/B | 3.02 | ||
| P/tB | 4.45 | ||
| EV/EBITDA | 16.8 |
EPS(TTM)0.85
EY4.54%
EPS(NY)0.97
Fwd EY5.18%
FCF(TTM)0.94
FCFY5.03%
OCF(TTM)0.94
OCFY5.03%
SpS2.9
BVpS6.19
TBVpS4.21
PEG (NY)1.2
PEG (5Y)2.03
Graham Number10.88
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 | 6.99 |
F-Score5
WACC6.96%
ROIC/WACC1.49
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 Y18.39%
EPS Next 2Y18.52%
EPS Next 3Y17.39%
EPS Next 5Y17.1%
Revenue 1Y (TTM)13.95%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%20.64%
Revenue Next Year14.37%
Revenue Next 2Y14.34%
Revenue Next 3Y13.42%
Revenue Next 5Y15.18%
EBIT growth 1Y37.58%
EBIT growth 3Y39.33%
EBIT growth 5Y13.34%
EBIT Next Year50.31%
EBIT Next 3Y25.28%
EBIT Next 5Y22.89%
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 18.39% in the next year.