TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - NYSE:TME - US88034P1093 - ADR
23.03 USD
+0.1 (+0.44%)
We assign a fundamental rating of 7 out of 10 to TME. TME was compared to 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 not priced too expensively while it is growing strongly. Keep and eye on this one! With these ratings, TME could be worth investigating further 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
Looking at the Return On Assets, with a value of 11.32%, TME belongs to the top of the industry, outperforming 89.87% of the companies in the same industry.
The Return On Equity of TME (15.09%) is better than 83.54% of its industry peers.
TME has a better Return On Invested Capital (9.71%) than 84.81% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TME is below the industry average of 9.15%.
The 3 year average ROIC (6.52%) for TME is below the current ROIC(9.71%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.32% | ||
| ROE | 15.09% | ||
| ROIC | 9.71% |
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
With an excellent Profit Margin value of 33.83%, 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.
The Operating Margin of TME (28.23%) is better than 96.20% of its industry peers.
TME's Operating Margin has improved in the last couple of years.
The Gross Margin of TME (43.72%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of TME has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.23% | ||
| PM (TTM) | 33.83% | ||
| GM | 43.72% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TME is still creating some value.
TME has less shares outstanding than it did 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.
2.2 Solvency
TME has an Altman-Z score of 8.19. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 8.19, TME belongs to the best of the industry, outperforming 91.14% of the companies in the same industry.
TME has a debt to FCF ratio of 0.69. This is a very positive value and a sign of high solvency as it would only need 0.69 years to pay back of all of its debts.
TME's Debt to FCF ratio of 0.69 is amongst the best of the industry. TME outperforms 84.81% of its industry peers.
A Debt/Equity ratio of 0.06 indicates that TME is not too dependend on debt financing.
TME's Debt to Equity ratio of 0.06 is fine compared to the rest of the industry. TME outperforms 64.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.69 | ||
| Altman-Z | 8.19 |
ROIC/WACC1.38
WACC7.05%
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 74.68% 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 75.95% 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 35.73%, which is quite impressive.
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 10.52% 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)35.73%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%39.5%
Revenue 1Y (TTM)10.52%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%17.91%
3.2 Future
The Earnings Per Share is expected to grow by 17.09% on average over the next years. This is quite good.
The Revenue is expected to grow by 15.27% on average over the next years. This is quite good.
EPS Next Y18.01%
EPS Next 2Y18.3%
EPS Next 3Y17.39%
EPS Next 5Y17.09%
Revenue Next Year14.32%
Revenue Next 2Y14.28%
Revenue Next 3Y13.42%
Revenue Next 5Y15.27%
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
The Price/Earnings ratio is 29.15, which means the current valuation is very expensive for TME.
Compared to the rest of the industry, the Price/Earnings ratio of TME indicates a somewhat cheap valuation: TME is cheaper than 77.22% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 27.53. TME is around the same levels.
A Price/Forward Earnings ratio of 23.89 indicates a rather expensive valuation of TME.
77.22% of the companies in the same industry are more expensive than TME, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.04. TME is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.15 | ||
| Fwd PE | 23.89 |
4.2 Price Multiples
TME's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, TME is valued a bit cheaper than 75.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.73 | ||
| EV/EBITDA | 22.75 |
4.3 Compensation for Growth
TME's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct 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 17.39% in the coming years.
PEG (NY)1.62
PEG (5Y)2.68
EPS Next 2Y18.3%
EPS Next 3Y17.39%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.31%, TME has a reasonable but not impressive dividend return.
TME's Dividend Yield is rather good when compared to the industry average which is at 27.49. TME pays more dividend than 88.61% of the companies in the same industry.
With a Dividend Yield of 1.31, TME pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
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 2Y18.3%
EPS Next 3Y17.39%
NYSE:TME (10/16/2025, 10:12:09 AM)
23.03
+0.1 (+0.44%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners67.61%
Inst Owner Change-0.07%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap35.49B
Analysts81.18
Price Target28 (21.58%)
Short Float %5.28%
Short Ratio2.8
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.31% |
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)7.25%
Min EPS beat(2)2.25%
Max EPS beat(2)12.25%
EPS beat(4)3
Avg EPS beat(4)5.56%
Min EPS beat(4)-4.78%
Max EPS beat(4)12.53%
EPS beat(8)7
Avg EPS beat(8)3.76%
EPS beat(12)10
Avg EPS beat(12)5.02%
EPS beat(16)13
Avg EPS beat(16)6.05%
Revenue beat(2)2
Avg Revenue beat(2)2.56%
Min Revenue beat(2)0.15%
Max Revenue beat(2)4.97%
Revenue beat(4)3
Avg Revenue beat(4)1.24%
Min Revenue beat(4)-1.38%
Max Revenue beat(4)4.97%
Revenue beat(8)6
Avg Revenue beat(8)1.28%
Revenue beat(12)9
Avg Revenue beat(12)1.13%
Revenue beat(16)10
Avg Revenue beat(16)0.84%
PT rev (1m)4.67%
PT rev (3m)49.88%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.48%
EPS NY rev (1m)0.06%
EPS NY rev (3m)4.17%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.73%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 29.15 | ||
| Fwd PE | 23.89 | ||
| P/S | 8.35 | ||
| P/FCF | 28.73 | ||
| P/OCF | 28.73 | ||
| P/B | 3.73 | ||
| P/tB | 5.48 | ||
| EV/EBITDA | 22.75 |
EPS(TTM)0.79
EY3.43%
EPS(NY)0.96
Fwd EY4.19%
FCF(TTM)0.8
FCFY3.48%
OCF(TTM)0.8
OCFY3.48%
SpS2.76
BVpS6.18
TBVpS4.2
PEG (NY)1.62
PEG (5Y)2.68
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.32% | ||
| ROE | 15.09% | ||
| ROCE | 11.56% | ||
| ROIC | 9.71% | ||
| ROICexc | 15.37% | ||
| ROICexgc | 28.71% | ||
| OM | 28.23% | ||
| PM (TTM) | 33.83% | ||
| GM | 43.72% | ||
| FCFM | 29.08% |
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%
ROICexcg growth 3Y16.02%
ROICexcg 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 Turnover0.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.69 | ||
| Debt/EBITDA | 0.4 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 92.44% | ||
| Profit Quality | 85.96% | ||
| Current Ratio | 2.09 | ||
| Quick Ratio | 2.09 | ||
| Altman-Z | 8.19 |
F-Score5
WACC7.05%
ROIC/WACC1.38
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)35.73%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%39.5%
EPS Next Y18.01%
EPS Next 2Y18.3%
EPS Next 3Y17.39%
EPS Next 5Y17.09%
Revenue 1Y (TTM)10.52%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%17.91%
Revenue Next Year14.32%
Revenue Next 2Y14.28%
Revenue Next 3Y13.42%
Revenue Next 5Y15.27%
EBIT growth 1Y43.69%
EBIT growth 3Y39.33%
EBIT growth 5Y13.34%
EBIT Next Year50.31%
EBIT Next 3Y25.28%
EBIT Next 5Y22.78%
FCF growth 1Y14.83%
FCF growth 3Y55.02%
FCF growth 5Y9.34%
OCF growth 1Y14.83%
OCF growth 3Y25.17%
OCF growth 5Y10.63%