TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TME - US88034P1093 - ADR
17.715 USD
+0.09 (+0.54%)
TME gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 80 industry peers in the Entertainment industry. TME scores excellent points on both the profitability and health parts. This is a solid base for a good stock. TME is not overvalued while it is showing excellent growth. This is an interesting combination. These ratings could make TME a good candidate for growth 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.
In the past 5 years TME always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of TME (11.95%) is better 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 Return On Invested Capital of 10.39%. This is amongst the best in the industry. TME outperforms 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 8.70%.
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.
With an excellent Operating Margin value of 28.82%, TME belongs to the best 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.
With a Gross Margin value of 43.90%, TME perfoms like the industry average, outperforming 51.25% 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
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.
Compared to 5 years ago, TME has less shares outstanding
TME has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.60 indicates that TME is not in any danger for bankruptcy at the moment.
TME's Altman-Z score of 6.60 is amongst the best of the industry. TME outperforms 86.25% 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.
TME has a better Debt to FCF ratio (0.59) than 87.50% of its industry peers.
A Debt/Equity ratio of 0.06 indicates that TME is not too dependend on debt financing.
The Debt to Equity ratio of TME (0.06) is better than 66.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 6.6 |
ROIC/WACC1.11
WACC9.33%
2.3 Liquidity
A Current Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
TME's Current ratio of 2.09 is fine compared to the rest of the industry. TME outperforms 76.25% of its industry peers.
A Quick Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
Looking at the Quick ratio, with a value of 2.09, TME is in the better half of the industry, outperforming 76.25% of the companies in the same industry.
| 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.
The Earnings Per Share has been growing by 10.88% on average over the past years. This is quite good.
Looking at the last year, TME shows a quite strong growth in Revenue. The Revenue has grown by 13.95% in the last year.
TME shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.23% yearly.
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 17.33% yearly.
Based on estimates for the next years, TME will show a quite strong growth in Revenue. The Revenue will grow by 15.04% on average per year.
EPS Next Y22.26%
EPS Next 2Y18.33%
EPS Next 3Y16.43%
EPS Next 5Y17.33%
Revenue Next Year15.28%
Revenue Next 2Y14.16%
Revenue Next 3Y13.65%
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
A Price/Earnings ratio of 20.60 indicates a rather expensive valuation of TME.
Based on the Price/Earnings ratio, TME is valued a bit cheaper than 80.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.92, TME is valued a bit cheaper.
TME is valuated rather expensively with a Price/Forward Earnings ratio of 18.07.
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.
TME is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.46, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.6 | ||
| Fwd PE | 18.07 |
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 67.50% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, TME is valued cheaply inside the industry as 86.25% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.55 | ||
| EV/EBITDA | 15.34 |
4.3 Compensation for Growth
The 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 16.43% in the coming years.
PEG (NY)0.93
PEG (5Y)1.89
EPS Next 2Y18.33%
EPS Next 3Y16.43%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.74%, TME has a reasonable but not impressive dividend return.
The stock price of TME dropped by -25.43% 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.
TME's Dividend Yield is rather good when compared to the industry average which is at 8.00. TME pays more dividend than 88.75% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, TME has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
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 2Y18.33%
EPS Next 3Y16.43%
NYSE:TME (12/29/2025, 3:54:06 PM)
17.715
+0.09 (+0.54%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners62.48%
Inst Owner Change-5.63%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap27.30B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.39 (48.97%)
Short Float %3.61%
Short Ratio2.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
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)-1.25%
PT rev (3m)-4.54%
EPS NQ rev (1m)0.11%
EPS NQ rev (3m)-0.32%
EPS NY rev (1m)3.27%
EPS NY rev (3m)3.61%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.78%
Revenue NY rev (1m)0.79%
Revenue NY rev (3m)0.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.6 | ||
| Fwd PE | 18.07 | ||
| P/S | 6.04 | ||
| P/FCF | 18.55 | ||
| P/OCF | 18.55 | ||
| P/B | 2.82 | ||
| P/tB | 4.15 | ||
| EV/EBITDA | 15.34 |
EPS(TTM)0.86
EY4.85%
EPS(NY)0.98
Fwd EY5.53%
FCF(TTM)0.95
FCFY5.39%
OCF(TTM)0.95
OCFY5.39%
SpS2.93
BVpS6.28
TBVpS4.27
PEG (NY)0.93
PEG (5Y)1.89
Graham Number11.02
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 | 6.6 |
F-Score5
WACC9.33%
ROIC/WACC1.11
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 5Y17.33%
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 5Y15.04%
EBIT growth 1Y37.58%
EBIT growth 3Y39.33%
EBIT growth 5Y13.34%
EBIT Next Year51.35%
EBIT Next 3Y23.15%
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 22.26% in the next year.