TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TME - US88034P1093 - ADR
17.35 USD
-0.14 (-0.8%)
17.46 USD
+0.11 (+0.63%)
We assign a fundamental rating of 8 out of 10 to TME. TME was compared to 80 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 has both an excellent growth and valuation score. This means it is growing and it is still cheap. This is a rare combination! These ratings would make TME suitable for value and 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.
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
TME has a better Return On Assets (11.95%) than 91.25% of its industry peers.
The Return On Equity of TME (15.93%) is better than 86.25% of its industry peers.
TME has a better Return On Invested Capital (10.39%) than 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 3 year average ROIC (6.52%) for TME is below the current ROIC(10.39%), indicating increased profibility in the last year.
| 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
TME's Profit Margin of 34.08% is amongst the best of the industry. TME outperforms 100.00% of its industry peers.
In the last couple of years the Profit Margin of TME has grown nicely.
Looking at the Operating Margin, with a value of 28.82%, TME belongs to the top of the industry, outperforming 96.25% of the companies in the same industry.
TME's Operating Margin has improved in the last couple of years.
TME has a Gross Margin (43.90%) which is in line with 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.
TME has less shares outstanding than it did 5 years ago.
TME has a better debt/assets ratio than last year.
2.2 Solvency
TME has an Altman-Z score of 6.50. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 6.50, TME belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
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.
TME has a better Debt to Equity ratio (0.06) than 66.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 6.5 |
ROIC/WACC1.14
WACC9.13%
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 76.25% of the companies in the same industry.
A Quick Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
TME has a Quick ratio of 2.09. This is in the better half of the industry: TME outperforms 76.25% 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.
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%.
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
TME is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.91% yearly.
Based on estimates for the next years, TME will show a quite strong growth in Revenue. The Revenue will grow by 14.77% on average per year.
EPS Next Y22.26%
EPS Next 2Y18.33%
EPS Next 3Y16.43%
EPS Next 5Y16.91%
Revenue Next Year15.28%
Revenue Next 2Y14.16%
Revenue Next 3Y13.65%
Revenue Next 5Y14.77%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last 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
Based on the Price/Earnings ratio of 19.94, the valuation of TME can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of TME indicates a rather cheap valuation: TME is cheaper than 81.25% of the companies listed in the same industry.
TME is valuated rather cheaply when we compare the Price/Earnings ratio to 27.19, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 17.62, the valuation of TME can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TME indicates a rather cheap valuation: TME is cheaper than 85.00% of the companies listed in the same industry.
When comparing the Price/Forward Earnings ratio of TME to the average of the S&P500 Index (23.92), we can say TME is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.94 | ||
| Fwd PE | 17.62 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TME is valued a bit cheaper than 68.75% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TME is valued cheaper than 86.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.09 | ||
| EV/EBITDA | 14.97 |
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)0.9
PEG (5Y)1.83
EPS Next 2Y18.33%
EPS Next 3Y16.43%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.76%, TME has a reasonable but not impressive dividend return.
In the last 3 months the price of TME has falen by -22.65%. 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 8.69, 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 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.76% |
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 2Y18.33%
EPS Next 3Y16.43%
17.35
-0.14 (-0.8%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners62.89%
Inst Owner Change0.08%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap26.73B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.39 (52.1%)
Short Float %4.01%
Short Ratio2.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.76% |
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%
PT rev (3m)-5.76%
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)0.02%
Revenue NY rev (3m)0.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.94 | ||
| Fwd PE | 17.62 | ||
| P/S | 5.89 | ||
| P/FCF | 18.09 | ||
| P/OCF | 18.09 | ||
| P/B | 2.75 | ||
| P/tB | 4.04 | ||
| EV/EBITDA | 14.97 |
EPS(TTM)0.87
EY5.01%
EPS(NY)0.98
Fwd EY5.68%
FCF(TTM)0.96
FCFY5.53%
OCF(TTM)0.96
OCFY5.53%
SpS2.95
BVpS6.31
TBVpS4.29
PEG (NY)0.9
PEG (5Y)1.83
Graham Number11.11
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 | 6.5 |
F-Score5
WACC9.13%
ROIC/WACC1.14
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 Year15.28%
Revenue Next 2Y14.16%
Revenue Next 3Y13.65%
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 19.94 and the Price/Book (PB) ratio is 2.75.
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.