WARNER MUSIC GROUP CORP-CL A (WMG)
US9345502036 - Common Stock
Overall WMG gets a fundamental rating of 5 out of 10. We evaluated WMG against 72 industry peers in the Entertainment industry. While WMG has a great profitability rating, there are quite some concerns on its financial health. WMG has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year WMG was profitable.
In the past year WMG had a positive cash flow from operations.
Of the past 5 years WMG 4 years were profitable.
Each year in the past 5 years WMG had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.69%, WMG is in the better half of the industry, outperforming 77.46% of the companies in the same industry.
With an excellent Return On Equity value of 82.82%, WMG belongs to the best of the industry, outperforming 98.59% of the companies in the same industry.
The Return On Invested Capital of WMG (13.96%) is better than 90.14% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WMG is significantly below the industry average of 86.07%.
The 3 year average ROIC (12.68%) for WMG is below the current ROIC(13.96%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.69% | ||
| ROE | 82.82% | ||
| ROIC | 13.96% |
ROA(3y)5.53%
ROA(5y)2.67%
ROE(3y)192.94%
ROE(5y)N/A
ROIC(3y)12.68%
ROIC(5y)N/A
1.3 Margins
The Profit Margin of WMG (6.68%) is better than 78.87% of its industry peers.
WMG's Profit Margin has improved in the last couple of years.
The Operating Margin of WMG (15.06%) is better than 84.51% of its industry peers.
WMG's Operating Margin has improved in the last couple of years.
WMG has a Gross Margin of 47.79%. This is comparable to the rest of the industry: WMG outperforms 56.34% of its industry peers.
WMG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.06% | ||
| PM (TTM) | 6.68% | ||
| GM | 47.79% |
OM growth 3Y9.45%
OM growth 5Y13.62%
PM growth 3Y5.66%
PM growth 5Y3.14%
GM growth 3Y-0.34%
GM growth 5Y0.62%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WMG is creating some value.
WMG has more shares outstanding than it did 1 year ago.
The number of shares outstanding for WMG has been increased compared to 5 years ago.
WMG has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.81, we must say that WMG is in the distress zone and has some risk of bankruptcy.
WMG's Altman-Z score of 1.81 is fine compared to the rest of the industry. WMG outperforms 64.79% of its industry peers.
The Debt to FCF ratio of WMG is 8.90, which is on the high side as it means it would take WMG, 8.90 years of fcf income to pay off all of its debts.
WMG has a Debt to FCF ratio of 8.90. This is in the better half of the industry: WMG outperforms 67.61% of its industry peers.
A Debt/Equity ratio of 7.75 is on the high side and indicates that WMG has dependencies on debt financing.
The Debt to Equity ratio of WMG (7.75) is worse than 80.28% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.75 | ||
| Debt/FCF | 8.9 | ||
| Altman-Z | 1.81 |
ROIC/WACC1.73
WACC8.07%
2.3 Liquidity
WMG has a Current Ratio of 0.68. This is a bad value and indicates that WMG is not financially healthy enough and could expect problems in meeting its short term obligations.
WMG has a Current ratio of 0.68. This is in the lower half of the industry: WMG underperforms 69.01% of its industry peers.
A Quick Ratio of 0.65 indicates that WMG may have some problems paying its short term obligations.
The Quick ratio of WMG (0.65) is worse than 70.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.65 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 30.23% over the past year.
WMG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.64% yearly.
Looking at the last year, WMG shows a small growth in Revenue. The Revenue has grown by 6.44% in the last year.
Measured over the past years, WMG shows a small growth in Revenue. The Revenue has been growing by 7.51% on average per year.
EPS 1Y (TTM)30.23%
EPS 3Y24.53%
EPS 5Y10.64%
EPS Q2Q%-76.47%
Revenue 1Y (TTM)6.44%
Revenue growth 3Y6.63%
Revenue growth 5Y7.51%
Sales Q2Q%2.77%
3.2 Future
WMG is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.29% yearly.
WMG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.38% yearly.
EPS Next Y18.15%
EPS Next 2Y18.57%
EPS Next 3Y16.96%
EPS Next 5Y12.29%
Revenue Next Year3.13%
Revenue Next 2Y4.74%
Revenue Next 3Y5.43%
Revenue Next 5Y5.38%
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 stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
WMG is valuated quite expensively with a Price/Earnings ratio of 27.82.
71.83% of the companies in the same industry are more expensive than WMG, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.73, WMG is valued at the same level.
WMG is valuated rather expensively with a Price/Forward Earnings ratio of 23.55.
Based on the Price/Forward Earnings ratio, WMG is valued a bit cheaper than 71.83% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.83, WMG is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.82 | ||
| Fwd PE | 23.55 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WMG is valued a bit cheaper than 66.20% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, WMG is valued a bit cheaper than 73.24% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 35.79 | ||
| EV/EBITDA | 15.03 |
4.3 Compensation for Growth
WMG's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of WMG may justify a higher PE ratio.
WMG's earnings are expected to grow with 16.96% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.53
PEG (5Y)2.61
EPS Next 2Y18.57%
EPS Next 3Y16.96%
5. Dividend
5.1 Amount
WMG has a Yearly Dividend Yield of 2.34%.
WMG's Dividend Yield is rather good when compared to the industry average which is at 3.51. WMG pays more dividend than 91.55% of the companies in the same industry.
WMG's Dividend Yield is comparable with the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.34% |
5.2 History
The dividend of WMG is nicely growing with an annual growth rate of 30.53%!
WMG has been paying a dividend for over 5 years, so it has already some track record.
WMG has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)30.53%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
84.15% of the earnings are spent on dividend by WMG. This is not a sustainable payout ratio.
WMG's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP84.15%
EPS Next 2Y18.57%
EPS Next 3Y16.96%
WARNER MUSIC GROUP CORP-CL A
NASDAQ:WMG (12/20/2024, 8:00:02 PM)
After market: 31.16 0 (0%)31.16
+0.43 (+1.4%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners103.2%
Inst Owner Change2.81%
Ins Owners2.02%
Ins Owner Change-9.29%
Market Cap16.14B
Analysts73.91
Price Target36.55 (17.3%)
Short Float %5.86%
Short Ratio5.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.34% |
Dividend Growth(5Y)30.53%
DP84.15%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-26.64%
Min EPS beat(2)-71.28%
Max EPS beat(2)18%
EPS beat(4)2
Avg EPS beat(4)-3%
Min EPS beat(4)-71.28%
Max EPS beat(4)65.85%
EPS beat(8)4
Avg EPS beat(8)-5.47%
EPS beat(12)7
Avg EPS beat(12)8.9%
EPS beat(16)8
Avg EPS beat(16)3.65%
Revenue beat(2)1
Avg Revenue beat(2)-0.11%
Min Revenue beat(2)-1.65%
Max Revenue beat(2)1.43%
Revenue beat(4)2
Avg Revenue beat(4)0.79%
Min Revenue beat(4)-1.65%
Max Revenue beat(4)3.49%
Revenue beat(8)4
Avg Revenue beat(8)0.96%
Revenue beat(12)8
Avg Revenue beat(12)1.72%
Revenue beat(16)12
Avg Revenue beat(16)2.63%
PT rev (1m)0.52%
PT rev (3m)1.3%
EPS NQ rev (1m)-3.86%
EPS NQ rev (3m)-15.67%
EPS NY rev (1m)-6.78%
EPS NY rev (3m)-7.73%
Revenue NQ rev (1m)-1.33%
Revenue NQ rev (3m)-4.64%
Revenue NY rev (1m)-1.27%
Revenue NY rev (3m)-1.54%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.82 | ||
| Fwd PE | 23.55 | ||
| P/S | 2.51 | ||
| P/FCF | 35.79 | ||
| P/OCF | 21.41 | ||
| P/B | 31.16 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.03 |
EPS(TTM)1.12
EY3.59%
EPS(NY)1.32
Fwd EY4.25%
FCF(TTM)0.87
FCFY2.79%
OCF(TTM)1.46
OCFY4.67%
SpS12.41
BVpS1
TBVpS-7.75
PEG (NY)1.53
PEG (5Y)2.61
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.69% | ||
| ROE | 82.82% | ||
| ROCE | 18.41% | ||
| ROIC | 13.96% | ||
| ROICexc | 16.08% | ||
| ROICexgc | 2293.24% | ||
| OM | 15.06% | ||
| PM (TTM) | 6.68% | ||
| GM | 47.79% | ||
| FCFM | 7.02% |
ROA(3y)5.53%
ROA(5y)2.67%
ROE(3y)192.94%
ROE(5y)N/A
ROIC(3y)12.68%
ROIC(5y)N/A
ROICexc(3y)14.58%
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)16.73%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y7.45%
ROICexc growth 5Y8.97%
OM growth 3Y9.45%
OM growth 5Y13.62%
PM growth 3Y5.66%
PM growth 5Y3.14%
GM growth 3Y-0.34%
GM growth 5Y0.62%
F-Score5
Asset Turnover0.7
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.75 | ||
| Debt/FCF | 8.9 | ||
| Debt/EBITDA | 3.1 | ||
| Cap/Depr | 92.66% | ||
| Cap/Sales | 4.72% | ||
| Interest Coverage | 5.29 | ||
| Cash Conversion | 58.22% | ||
| Profit Quality | 105.13% | ||
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.65 | ||
| Altman-Z | 1.81 |
F-Score5
WACC8.07%
ROIC/WACC1.73
Cap/Depr(3y)87.14%
Cap/Depr(5y)99.38%
Cap/Sales(3y)4.74%
Cap/Sales(5y)5.57%
Profit Quality(3y)95.6%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)30.23%
EPS 3Y24.53%
EPS 5Y10.64%
EPS Q2Q%-76.47%
EPS Next Y18.15%
EPS Next 2Y18.57%
EPS Next 3Y16.96%
EPS Next 5Y12.29%
Revenue 1Y (TTM)6.44%
Revenue growth 3Y6.63%
Revenue growth 5Y7.51%
Sales Q2Q%2.77%
Revenue Next Year3.13%
Revenue Next 2Y4.74%
Revenue Next 3Y5.43%
Revenue Next 5Y5.38%
EBIT growth 1Y22.69%
EBIT growth 3Y16.7%
EBIT growth 5Y22.15%
EBIT Next Year53.67%
EBIT Next 3Y22.25%
EBIT Next 5Y14.92%
FCF growth 1Y1.12%
FCF growth 3Y91.72%
FCF growth 5Y12.08%
OCF growth 1Y9.75%
OCF growth 3Y5.73%
OCF growth 5Y13.52%