TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TME - US88034P1093 - ADR
17.555 USD
-0.93 (-5.01%)
Overall TME gets a fundamental rating of 8 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 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
In the past year TME was profitable.
In the past year TME had a positive cash flow from operations.
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
With an excellent Return On Assets value of 11.95%, TME belongs to the best of the industry, outperforming 91.25% of the companies in the same industry.
TME has a Return On Equity of 15.93%. This is amongst the best in the industry. TME outperforms 86.25% of its industry peers.
With an excellent Return On Invested Capital value of 10.39%, TME belongs to the best of the industry, outperforming 87.50% 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 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.
TME's Profit Margin has improved in the last couple of years.
TME has a Operating Margin of 28.82%. This is amongst the best in 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 51.25% 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
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.
Compared to 5 years ago, TME has less shares outstanding
TME has a better debt/assets ratio than last year.
2.2 Solvency
TME has an Altman-Z score of 6.84. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.84, TME belongs to the top of the industry, outperforming 88.75% of the companies in the same industry.
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 87.50% 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 Debt to Equity ratio of 0.06. This is in the better half of the industry: TME outperforms 66.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 6.84 |
ROIC/WACC1.12
WACC9.29%
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'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.
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
The Earnings Per Share has grown by an impressive 36.04% over the past year.
TME shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.88% yearly.
The Revenue has grown by 13.95% in the past year. This is quite good.
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.
The Revenue is expected to grow by 15.04% on average over the next years. This is quite good.
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
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
With a Price/Earnings ratio of 20.41, TME is valued on the expensive side.
Based on the Price/Earnings ratio, TME is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
TME is valuated rather cheaply when we compare the Price/Earnings ratio to 26.87, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 17.88 indicates a rather expensive valuation of TME.
Based on the Price/Forward Earnings ratio, TME is valued cheaper than 85.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.46. TME is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.41 | ||
| Fwd PE | 17.88 |
4.2 Price Multiples
TME's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TME is cheaper than 65.00% of the companies in the same industry.
85.00% of the companies in the same industry are more expensive than TME, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.35 | ||
| EV/EBITDA | 16.22 |
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.
TME's earnings are expected to grow with 16.43% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.92
PEG (5Y)1.88
EPS Next 2Y18.33%
EPS Next 3Y16.43%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.75%, 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 8.64. TME pays more dividend than 88.75% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.94, TME has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
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%
NYSE:TME (1/6/2026, 3:52:04 PM)
17.555
-0.93 (-5.01%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners62.89%
Inst Owner Change0%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap27.05B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.39 (50.33%)
Short Float %4.01%
Short Ratio2.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
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)-1.25%
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 | 20.41 | ||
| Fwd PE | 17.88 | ||
| P/S | 5.97 | ||
| P/FCF | 18.35 | ||
| P/OCF | 18.35 | ||
| P/B | 2.79 | ||
| P/tB | 4.1 | ||
| EV/EBITDA | 16.22 |
EPS(TTM)0.86
EY4.9%
EPS(NY)0.98
Fwd EY5.59%
FCF(TTM)0.96
FCFY5.45%
OCF(TTM)0.96
OCFY5.45%
SpS2.94
BVpS6.29
TBVpS4.28
PEG (NY)0.92
PEG (5Y)1.88
Graham Number11.03
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 | 6.84 |
F-Score5
WACC9.29%
ROIC/WACC1.12
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.
What is the valuation status of TENCENT MUSIC ENTERTAINM-ADR (TME) stock?
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 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 20.41 and the Price/Book (PB) ratio is 2.79.
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.