TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
NYSE:TME - New York Stock Exchange, Inc. - US88034P1093 - ADR
Taking everything into account, TME scores 7 out of 10 in our fundamental rating. TME was compared to 72 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 scores decently on growth, while it is valued quite cheap. This could make an interesting combination. These ratings could make TME a good candidate for value 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.
TME had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 7.93%, TME belongs to the best of the industry, outperforming 87.88% of the companies in the same industry.
TME has a better Return On Equity (10.72%) than 81.82% of its industry peers.
The Return On Invested Capital of TME (9.11%) is better than 80.30% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TME is significantly below the industry average of 94.24%.
The last Return On Invested Capital (9.11%) for TME is above the 3 year average (5.26%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.93% | ||
| ROE | 10.72% | ||
| ROIC | 9.11% |
ROA(3y)5.5%
ROA(5y)6.03%
ROE(3y)7.49%
ROE(5y)7.91%
ROIC(3y)5.26%
ROIC(5y)5.81%
1.3 Margins
With an excellent Profit Margin value of 21.53%, TME belongs to the best of the industry, outperforming 93.94% of the companies in the same industry.
TME's Profit Margin has improved in the last couple of years.
TME has a Operating Margin of 23.87%. This is amongst the best in the industry. TME outperforms 92.42% of its industry peers.
TME's Operating Margin has been stable in the last couple of years.
TME's Gross Margin of 41.00% is in line compared to the rest of the industry. TME outperforms 40.91% of its industry peers.
In the last couple of years the Gross Margin of TME has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.87% | ||
| PM (TTM) | 21.53% | ||
| GM | 41% |
OM growth 3Y10.43%
OM growth 5Y-0.23%
PM growth 3Y7.55%
PM growth 5Y12.92%
GM growth 3Y3.42%
GM growth 5Y-1.64%
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.
The number of shares outstanding for TME remains at a similar level compared to 1 year ago.
Compared to 5 years ago, TME has more shares outstanding
TME has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 5.38 indicates that TME is not in any danger for bankruptcy at the moment.
TME has a better Altman-Z score (5.38) than 90.91% of its industry peers.
The Debt to FCF ratio of TME is 0.62, which is an excellent value as it means it would take TME, only 0.62 years of fcf income to pay off all of its debts.
TME has a Debt to FCF ratio of 0.62. This is amongst the best in the industry. TME outperforms 86.36% of its industry peers.
A Debt/Equity ratio of 0.11 indicates that TME is not too dependend on debt financing.
TME has a Debt to Equity ratio of 0.11. This is in the better half of the industry: TME outperforms 68.18% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.11 | ||
| Debt/FCF | 0.62 | ||
| Altman-Z | 5.38 |
ROIC/WACC1.23
WACC7.4%
2.3 Liquidity
A Current Ratio of 2.49 indicates that TME has no problem at all paying its short term obligations.
TME has a better Current ratio (2.49) than 78.79% of its industry peers.
TME has a Quick Ratio of 2.49. This indicates that TME is financially healthy and has no problem in meeting its short term obligations.
TME has a Quick ratio of 2.49. This is amongst the best in the industry. TME outperforms 80.30% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.49 | ||
| Quick Ratio | 2.49 |
3. Growth
3.1 Past
TME shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 21.31%, which is quite impressive.
The Earnings Per Share has been growing by 22.63% on average over the past years. This is a very strong growth
Looking at the last year, TME shows a decrease in Revenue. The Revenue has decreased by -1.58% in the last year.
The Revenue has been growing slightly by 7.89% on average over the past years.
EPS 1Y (TTM)21.31%
EPS 3Y8.33%
EPS 5Y22.63%
EPS Q2Q%30.34%
Revenue 1Y (TTM)-1.58%
Revenue growth 3Y-1.63%
Revenue growth 5Y7.89%
Sales Q2Q%6.79%
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 14.54% on average per year.
The Revenue is expected to grow by 9.50% on average over the next years. This is quite good.
EPS Next Y28.54%
EPS Next 2Y21.6%
EPS Next 3Y18.74%
EPS Next 5Y14.54%
Revenue Next Year3.36%
Revenue Next 2Y6.19%
Revenue Next 3Y7.35%
Revenue Next 5Y9.5%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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
The Price/Earnings ratio is 17.67, which indicates a rather expensive current valuation of TME.
Based on the Price/Earnings ratio, TME is valued cheaply inside the industry as 83.33% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of TME to the average of the S&P500 Index (27.96), we can say TME is valued slightly cheaper.
TME is valuated correctly with a Price/Forward Earnings ratio of 14.25.
87.88% of the companies in the same industry are more expensive than TME, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.11, TME is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.67 | ||
| Fwd PE | 14.25 |
4.2 Price Multiples
63.64% of the companies in the same industry are more expensive than TME, based on the Enterprise Value to EBITDA ratio.
84.85% 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 | 13.67 | ||
| EV/EBITDA | 15.03 |
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.
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 18.74% in the coming years.
PEG (NY)0.62
PEG (5Y)0.78
EPS Next 2Y21.6%
EPS Next 3Y18.74%
5. Dividend
5.1 Amount
TME has a Yearly Dividend Yield of 1.28%.
TME's Dividend Yield is rather good when compared to the industry average which is at 3.27. TME pays more dividend than 89.39% of the companies in the same industry.
With a Dividend Yield of 1.28, TME pays less dividend than the S&P500 average, which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.28% |
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 Years0
Div Non Decr Years0
5.3 Sustainability
DPN/A
EPS Next 2Y21.6%
EPS Next 3Y18.74%
TENCENT MUSIC ENTERTAINM-ADR
NYSE:TME (1/17/2025, 8:04:00 PM)
After market: 10.8018 +0.02 (+0.2%)10.78
+0.38 (+3.65%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners58.46%
Inst Owner Change0.03%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap18.21B
Analysts80.54
Price Target14.37 (33.3%)
Short Float %3.75%
Short Ratio2.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.28% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.22%
Min EPS beat(2)-4.78%
Max EPS beat(2)0.34%
EPS beat(4)3
Avg EPS beat(4)0.75%
Min EPS beat(4)-4.78%
Max EPS beat(4)5.99%
EPS beat(8)6
Avg EPS beat(8)1.61%
EPS beat(12)9
Avg EPS beat(12)3.81%
EPS beat(16)12
Avg EPS beat(16)6.01%
Revenue beat(2)0
Avg Revenue beat(2)-1.07%
Min Revenue beat(2)-1.38%
Max Revenue beat(2)-0.76%
Revenue beat(4)2
Avg Revenue beat(4)0.19%
Min Revenue beat(4)-1.38%
Max Revenue beat(4)1.76%
Revenue beat(8)5
Avg Revenue beat(8)0.51%
Revenue beat(12)7
Avg Revenue beat(12)0.71%
Revenue beat(16)8
Avg Revenue beat(16)0.24%
PT rev (1m)-0.18%
PT rev (3m)1.48%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.06%
EPS NY rev (1m)0%
EPS NY rev (3m)0.11%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-5.4%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.67 | ||
| Fwd PE | 14.25 | ||
| P/S | 4.8 | ||
| P/FCF | 13.67 | ||
| P/OCF | 13.67 | ||
| P/B | 2.39 | ||
| P/tB | 3.89 | ||
| EV/EBITDA | 15.03 |
EPS(TTM)0.61
EY5.66%
EPS(NY)0.76
Fwd EY7.02%
FCF(TTM)0.79
FCFY7.32%
OCF(TTM)0.79
OCFY7.32%
SpS2.25
BVpS4.51
TBVpS2.77
PEG (NY)0.62
PEG (5Y)0.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.93% | ||
| ROE | 10.72% | ||
| ROCE | 10.46% | ||
| ROIC | 9.11% | ||
| ROICexc | 10.81% | ||
| ROICexgc | 18.1% | ||
| OM | 23.87% | ||
| PM (TTM) | 21.53% | ||
| GM | 41% | ||
| FCFM | 35.11% |
ROA(3y)5.5%
ROA(5y)6.03%
ROE(3y)7.49%
ROE(5y)7.91%
ROIC(3y)5.26%
ROIC(5y)5.81%
ROICexc(3y)7.47%
ROICexc(5y)9.62%
ROICexgc(3y)17.24%
ROICexgc(5y)38.43%
ROCE(3y)6.04%
ROCE(5y)6.67%
ROICexcg growth 3Y-19.24%
ROICexcg growth 5Y-37.68%
ROICexc growth 3Y-7.88%
ROICexc growth 5Y-10.79%
OM growth 3Y10.43%
OM growth 5Y-0.23%
PM growth 3Y7.55%
PM growth 5Y12.92%
GM growth 3Y3.42%
GM growth 5Y-1.64%
F-Score7
Asset Turnover0.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.11 | ||
| Debt/FCF | 0.62 | ||
| Debt/EBITDA | 0.78 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 127.76% | ||
| Profit Quality | 163.06% | ||
| Current Ratio | 2.49 | ||
| Quick Ratio | 2.49 | ||
| Altman-Z | 5.38 |
F-Score7
WACC7.4%
ROIC/WACC1.23
Cap/Depr(3y)160.75%
Cap/Depr(5y)118.42%
Cap/Sales(3y)5.58%
Cap/Sales(5y)3.92%
Profit Quality(3y)127.4%
Profit Quality(5y)127.24%
High Growth Momentum
Growth
EPS 1Y (TTM)21.31%
EPS 3Y8.33%
EPS 5Y22.63%
EPS Q2Q%30.34%
EPS Next Y28.54%
EPS Next 2Y21.6%
EPS Next 3Y18.74%
EPS Next 5Y14.54%
Revenue 1Y (TTM)-1.58%
Revenue growth 3Y-1.63%
Revenue growth 5Y7.89%
Sales Q2Q%6.79%
Revenue Next Year3.36%
Revenue Next 2Y6.19%
Revenue Next 3Y7.35%
Revenue Next 5Y9.5%
EBIT growth 1Y48.06%
EBIT growth 3Y8.64%
EBIT growth 5Y7.65%
EBIT Next Year65.33%
EBIT Next 3Y29.83%
EBIT Next 5Y23.91%
FCF growth 1Y68.22%
FCF growth 3Y12.08%
FCF growth 5Y2.38%
OCF growth 1Y68.22%
OCF growth 3Y14.52%
OCF growth 5Y5.43%