TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - NYSE:TME - US88034P1093 - ADR
18.93 USD
+0.25 (+1.34%)
18.95 USD
+0.02 (+0.11%)
Overall TME gets a fundamental rating of 7 out of 10. We evaluated TME against 79 industry peers in the Entertainment industry. TME has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. TME is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! These ratings would make TME suitable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year TME was profitable.
In the past year TME had a positive cash flow from operations.
Each year in the past 5 years TME has been profitable.
TME had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of TME (11.95%) is better than 89.87% of its industry peers.
Looking at the Return On Equity, with a value of 15.93%, TME belongs to the top of the industry, outperforming 82.28% of the companies in the same industry.
The Return On Invested Capital of TME (10.39%) is better than 86.08% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TME is below the industry average of 9.12%.
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.
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 51.90% 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
TME has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, TME has less shares outstanding
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.
2.2 Solvency
TME has an Altman-Z score of 6.97. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of TME (6.97) is better than 86.08% of its industry peers.
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.
TME has a better Debt to FCF ratio (0.59) than 86.08% of its industry peers.
A Debt/Equity ratio of 0.06 indicates that TME is not too dependend on debt financing.
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 | 6.97 |
ROIC/WACC1.49
WACC6.97%
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.
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 79.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.09 | ||
| Quick Ratio | 2.09 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 36.62% over the past year.
The Earnings Per Share has been growing by 10.88% on average over the past years. This is quite good.
The Revenue has grown by 13.95% in the past year. This is quite good.
The Revenue has been growing slightly by 2.23% on average over the past years.
EPS 1Y (TTM)36.62%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%34.99%
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.
TME is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.18% yearly.
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
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 22.27, the valuation of TME can be described as rather expensive.
Based on the Price/Earnings ratio, TME is valued cheaply inside the industry as 81.01% of the companies are valued more expensively.
TME's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 25.89.
The Price/Forward Earnings ratio is 19.48, which indicates a rather expensive current valuation of TME.
Based on the Price/Forward Earnings ratio, TME is valued cheaper than 82.28% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 34.59, TME is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.27 | ||
| Fwd PE | 19.48 |
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 64.56% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TME indicates a rather cheap valuation: TME is cheaper than 84.81% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.06 | ||
| EV/EBITDA | 16.7 |
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)1.21
PEG (5Y)2.05
EPS Next 2Y18.52%
EPS Next 3Y17.39%
5. Dividend
5.1 Amount
TME has a Yearly Dividend Yield of 1.64%. Purely for dividend investing, there may be better candidates out there.
In the last 3 months the price of TME has falen by -25.91%. 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 38.22. TME pays more dividend than 88.61% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.36, 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 2Y18.52%
EPS Next 3Y17.39%
18.93
+0.25 (+1.34%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners67.61%
Inst Owner Change-1.01%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap29.17B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target27.92 (47.49%)
Short Float %4.64%
Short Ratio2.86
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)7.02%
Min EPS beat(2)1.78%
Max EPS beat(2)12.25%
EPS beat(4)4
Avg EPS beat(4)7.2%
Min EPS beat(4)1.78%
Max EPS beat(4)12.53%
EPS beat(8)7
Avg EPS beat(8)3.98%
EPS beat(12)10
Avg EPS beat(12)3.47%
EPS beat(16)13
Avg EPS beat(16)4.66%
Revenue beat(2)2
Avg Revenue beat(2)3.42%
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)5.68%
EPS NY rev (1m)0.33%
EPS NY rev (3m)4.51%
Revenue NQ rev (1m)0.28%
Revenue NQ rev (3m)5.02%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)3.41%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.27 | ||
| Fwd PE | 19.48 | ||
| P/S | 6.53 | ||
| P/FCF | 20.06 | ||
| P/OCF | 20.06 | ||
| P/B | 3.05 | ||
| P/tB | 4.48 | ||
| EV/EBITDA | 16.7 |
EPS(TTM)0.85
EY4.49%
EPS(NY)0.97
Fwd EY5.13%
FCF(TTM)0.94
FCFY4.99%
OCF(TTM)0.94
OCFY4.99%
SpS2.9
BVpS6.21
TBVpS4.22
PEG (NY)1.21
PEG (5Y)2.05
Graham Number10.89
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 | 6.97 |
F-Score5
WACC6.97%
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)36.62%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%34.99%
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.