TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TME - US88034P1093 - ADR
18.58 USD
-0.14 (-0.75%)
18.5639 USD
-0.02 (-0.09%)
We assign a fundamental rating of 7 out of 10 to TME. TME was compared to 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 is not priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, TME could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
TME had positive earnings in the past year.
In the past year TME had a positive cash flow from operations.
In the past 5 years TME has always been profitable.
Each year in the past 5 years TME had a positive operating cash flow.
1.2 Ratios
TME's Return On Assets of 11.95% is amongst the best of the industry. TME outperforms 90.00% of its industry peers.
With an excellent Return On Equity value of 15.93%, TME belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
TME has a better Return On Invested Capital (10.39%) than 86.25% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TME is below the industry average of 9.08%.
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.
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.
Looking at the Gross Margin, with a value of 43.90%, TME is in line with its industry, outperforming 52.50% of the companies in the same 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.
The debt/assets ratio for TME has been reduced compared to a year ago.
2.2 Solvency
TME has an Altman-Z score of 6.92. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
TME's Altman-Z score of 6.92 is amongst the best of the industry. TME outperforms 87.50% 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.
The Debt to FCF ratio of TME (0.59) is better than 86.25% 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.
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 | 6.92 |
ROIC/WACC1.46
WACC7.12%
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 78.75% 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 78.75% 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.
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.
Looking at the last year, TME shows a quite strong growth in Revenue. The Revenue has grown by 13.95% in the last year.
TME shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.23% yearly.
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.
Based on estimates for the next years, TME will show a quite strong growth in Revenue. The Revenue will grow by 15.04% on average per year.
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
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
Based on the Price/Earnings ratio of 21.86, the valuation of TME can be described as rather expensive.
TME's Price/Earnings ratio is rather cheap when compared to the industry. TME is cheaper than 81.25% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.49, TME is valued at the same level.
A Price/Forward Earnings ratio of 19.09 indicates a rather expensive 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.
When comparing the Price/Forward Earnings ratio of TME to the average of the S&P500 Index (23.69), we can say TME is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.86 | ||
| Fwd PE | 19.09 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TME is valued a bit cheaper than 63.75% 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 85.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.61 | ||
| EV/EBITDA | 16.52 |
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.
TME has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as TME's earnings are expected to grow with 16.42% in the coming years.
PEG (NY)0.99
PEG (5Y)2.01
EPS Next 2Y18.38%
EPS Next 3Y16.42%
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 -24.13%. 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 34.07. TME pays more dividend than 88.75% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.31, TME is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
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%
18.58
-0.14 (-0.75%)
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 Cap28.63B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.39 (42.03%)
Short Float %3.66%
Short Ratio2.27
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)-5.46%
PT rev (3m)-1.35%
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)0.9%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.86 | ||
| Fwd PE | 19.09 | ||
| P/S | 6.38 | ||
| P/FCF | 19.61 | ||
| P/OCF | 19.61 | ||
| P/B | 2.98 | ||
| P/tB | 4.38 | ||
| EV/EBITDA | 16.52 |
EPS(TTM)0.85
EY4.57%
EPS(NY)0.97
Fwd EY5.24%
FCF(TTM)0.95
FCFY5.1%
OCF(TTM)0.95
OCFY5.1%
SpS2.91
BVpS6.23
TBVpS4.24
PEG (NY)0.99
PEG (5Y)2.01
Graham Number10.91
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 | 6.92 |
F-Score5
WACC7.12%
ROIC/WACC1.46
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.