TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis

USA • New York Stock Exchange • NYSE:TME • US88034P1093

16.78 USD
-0.39 (-2.27%)
At close: Jan 30, 2026
16.88 USD
+0.1 (+0.6%)
After Hours: 1/30/2026, 8:21:29 PM
Fundamental Rating

8

Overall TME gets a fundamental rating of 8 out of 10. We evaluated TME against 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 growing strongly while it also seems undervalued. This is an interesting combination These ratings could make TME a good candidate for value and growth and quality investing.


Dividend Valuation Growth Profitability Health

8

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.
  • TME had a positive operating cash flow in each of the past 5 years.
TME Yearly Net Income VS EBIT VS OCF VS FCFTME Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B 10B

1.2 Ratios

  • Looking at the Return On Assets, with a value of 11.95%, TME belongs to the top of the industry, outperforming 91.25% of the companies in the same industry.
  • TME has a Return On Equity of 15.93%. This is amongst the best in the industry. TME outperforms 86.25% of its industry peers.
  • The Return On Invested Capital of TME (10.39%) is better than 87.50% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for TME is below the industry average of 8.74%.
  • 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 RankSector 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%
TME Yearly ROA, ROE, ROICTME Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2 4 6 8

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.
  • TME's Operating Margin of 28.82% is amongst the best of the industry. TME outperforms 96.25% of its industry peers.
  • TME's Operating Margin has improved in the last couple of years.
  • With a Gross Margin value of 43.90%, TME perfoms like the industry average, outperforming 51.25% of the companies in the same industry.
  • TME's Gross Margin has improved in the last couple of years.
Industry RankSector 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%
TME Yearly Profit, Operating, Gross MarginsTME Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40

More info and screens

9

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 has been reduced compared to 1 year ago.
  • The number of shares outstanding for TME has been reduced compared to 5 years ago.
  • The debt/assets ratio for TME has been reduced compared to a year ago.
TME Yearly Shares OutstandingTME Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B
TME Yearly Total Debt VS Total AssetsTME Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B 80B

2.2 Solvency

  • An Altman-Z score of 6.32 indicates that TME is not in any danger for bankruptcy at the moment.
  • With an excellent Altman-Z score value of 6.32, TME belongs to the best of the industry, outperforming 88.75% of the companies in the same industry.
  • 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 has a better Debt to FCF ratio (0.59) 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.
  • TME has a better Debt to Equity ratio (0.06) than 66.25% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.06
Debt/FCF 0.59
Altman-Z 6.32
ROIC/WACC1.22
WACC8.54%
TME Yearly LT Debt VS Equity VS FCFTME Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B

2.3 Liquidity

  • A Current Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
  • TME has a better Current ratio (2.09) than 76.25% of its industry peers.
  • 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.
  • 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 RankSector Rank
Current Ratio 2.09
Quick Ratio 2.09
TME Yearly Current Assets VS Current LiabilitesTME Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B

More info and screens

7

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.
  • The Earnings Per Share has been growing by 10.88% on average over the past years. This is quite good.
  • TME shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.95%.
  • 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

  • The Earnings Per Share is expected to grow by 16.91% on average over the next years. This is quite good.
  • TME is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.77% yearly.
EPS Next Y22.58%
EPS Next 2Y18.33%
EPS Next 3Y16.49%
EPS Next 5Y16.91%
Revenue Next Year15.31%
Revenue Next 2Y14.21%
Revenue Next 3Y13.69%
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.
  • 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.
TME Yearly Revenue VS EstimatesTME Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 20B 40B 60B
TME Yearly EPS VS EstimatesTME Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 5 10 15

More info and screens

7

4. Valuation

4.1 Price/Earnings Ratio

  • The Price/Earnings ratio is 19.29, which indicates a rather expensive current valuation of TME.
  • 82.50% 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 28.32, TME is valued a bit cheaper.
  • The Price/Forward Earnings ratio is 16.96, which indicates a correct valuation of TME.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of TME indicates a rather cheap valuation: TME is cheaper than 86.25% of the companies listed in the same industry.
  • TME's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.57.
Industry RankSector Rank
PE 19.29
Fwd PE 16.96
TME Price Earnings VS Forward Price EarningsTME Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

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.
  • TME's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TME is cheaper than 88.75% of the companies in the same industry.
Industry RankSector Rank
P/FCF 17.41
EV/EBITDA 14.28
TME Per share dataTME EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6

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.
  • TME's earnings are expected to grow with 16.49% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.85
PEG (5Y)1.77
EPS Next 2Y18.33%
EPS Next 3Y16.49%

More info and screens

3

5. Dividend

5.1 Amount

  • With a Yearly Dividend Yield of 1.79%, TME has a reasonable but not impressive dividend return.
  • In the last 3 months the price of TME has falen by -24.82%. 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 7.59. TME pays more dividend than 88.75% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.83, TME has a dividend comparable with the average S&P500 company.
Industry RankSector Rank
Dividend Yield 1.79%

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
TME Yearly Dividends per shareTME Yearly Dividends per shareYearly Dividends per share 2024 2025 0.05 0.1 0.15

5.3 Sustainability

DPN/A
EPS Next 2Y18.33%
EPS Next 3Y16.49%
TME Yearly Income VS Free CF VS DividendTME Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B

More info and screens

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 19.29 and the Price/Book (PB) ratio is 2.65.


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 22.58% in the next year.