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%)
Overall TME gets a fundamental rating of 7 out of 10. We evaluated TME against 80 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! This makes TME very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
In the past year TME was profitable.
TME had a positive operating cash flow in the past year.
TME had positive earnings in each of the past 5 years.
Each year in the past 5 years TME had a positive operating cash flow.
1.2 Ratios
TME has a Return On Assets of 11.95%. This is amongst the best in 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.
Looking at the Return On Invested Capital, with a value of 10.39%, TME belongs to the top of the industry, outperforming 86.25% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TME is below the industry average of 9.08%.
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
Looking at the Profit Margin, with a value of 34.08%, TME belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
TME's Profit Margin has improved in the last couple of years.
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.
With a Gross Margin value of 43.90%, TME perfoms like the industry average, outperforming 52.50% of the companies in the same industry.
TME's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TME is creating some value.
The number of shares outstanding for TME has been reduced compared to 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.
The Altman-Z score of TME (6.92) is better than 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.
With an excellent Debt to FCF ratio value of 0.59, TME belongs to the best of the industry, outperforming 86.25% of the companies in the same industry.
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 65.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 6.92 |
ROIC/WACC1.44
WACC7.23%
2.3 Liquidity
TME has a Current Ratio of 2.09. This indicates that TME is financially healthy and has no problem in meeting its short term obligations.
TME has a Current ratio of 2.09. This is in the better half of the industry: TME outperforms 78.75% 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.
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
The Earnings Per Share has grown by an impressive 36.04% over the past year.
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.
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
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.
The Revenue is expected to grow by 15.04% on average over the next years. This is quite good.
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
With a Price/Earnings ratio of 21.86, TME is valued on the expensive side.
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.
When comparing the Price/Earnings ratio of TME to the average of the S&P500 Index (26.49), we can say TME is valued inline with the index average.
TME is valuated rather expensively with a Price/Forward Earnings ratio of 19.09.
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.
The average S&P500 Price/Forward Earnings ratio is at 23.69. TME is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.86 | ||
| Fwd PE | 19.09 |
4.2 Price Multiples
TME's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TME is cheaper than 63.75% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TME is valued cheaply inside the industry as 85.00% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.61 | ||
| EV/EBITDA | 16.52 |
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.
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.
The stock price of TME dropped by -24.13% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 34.07, 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 slightly below the S&P500 average, which is at 2.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.64% |
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
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
WACC7.23%
ROIC/WACC1.44
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.