TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TME - US88034P1093 - ADR
18.15 USD
-0.23 (-1.25%)
18.15 USD
0 (0%)
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 could make TME a good candidate 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.
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 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.
TME's Return On Invested Capital of 10.39% is amongst the best of the industry. TME outperforms 86.25% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TME is below the industry average of 9.08%.
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
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.
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.
The Gross Margin of TME (43.90%) is comparable to the rest of the 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
TME has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for TME has been reduced compared to 1 year ago.
The number of shares outstanding for TME has been reduced compared to 5 years ago.
Compared to 1 year ago, TME has an improved debt to assets ratio.
2.2 Solvency
TME has an Altman-Z score of 6.86. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
TME has a Altman-Z score of 6.86. This is amongst the best in the industry. TME outperforms 85.00% 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.
The Debt to FCF ratio of TME (0.59) is better than 86.25% of its industry peers.
A Debt/Equity ratio of 0.06 indicates that TME is not too dependend on debt financing.
TME has a Debt to Equity ratio of 0.06. This is in the better half of the industry: TME outperforms 65.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 6.86 |
ROIC/WACC1.43
WACC7.24%
2.3 Liquidity
A Current Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
The Current ratio of TME (2.09) is better than 78.75% of its industry peers.
A Quick Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
TME's Quick ratio of 2.09 is fine compared to the rest 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.
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.
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.
TME is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.04% yearly.
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
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
The Price/Earnings ratio is 21.10, which indicates a rather expensive current valuation of TME.
Based on the Price/Earnings ratio, TME is valued cheaply inside the industry as 81.25% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 26.59, TME is valued a bit cheaper.
A Price/Forward Earnings ratio of 18.63 indicates a rather expensive valuation of TME.
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 23.80, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.1 | ||
| Fwd PE | 18.63 |
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.
TME's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TME is cheaper than 85.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.14 | ||
| EV/EBITDA | 16.29 |
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.
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 16.42% in the coming years.
PEG (NY)0.96
PEG (5Y)1.94
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.
In the last 3 months the price of TME has falen by -27.40%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
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.
Compared to the average S&P500 Dividend Yield of 2.31, 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 2Y18.38%
EPS Next 3Y16.42%
18.15
-0.23 (-1.25%)
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 Cap27.97B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.39 (45.4%)
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 | 21.1 | ||
| Fwd PE | 18.63 | ||
| P/S | 6.23 | ||
| P/FCF | 19.14 | ||
| P/OCF | 19.14 | ||
| P/B | 2.91 | ||
| P/tB | 4.28 | ||
| EV/EBITDA | 16.29 |
EPS(TTM)0.86
EY4.74%
EPS(NY)0.97
Fwd EY5.37%
FCF(TTM)0.95
FCFY5.22%
OCF(TTM)0.95
OCFY5.22%
SpS2.91
BVpS6.23
TBVpS4.24
PEG (NY)0.96
PEG (5Y)1.94
Graham Number10.98
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 | 6.86 |
F-Score5
WACC7.24%
ROIC/WACC1.43
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.