WARNER MUSIC GROUP CORP-CL A (WMG) Fundamental Analysis & Valuation

NASDAQ:WMG • US9345502036

Current stock price

24.15 USD
+0.26 (+1.09%)
At close:
24.15 USD
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This WMG fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

8

1. WMG Profitability Analysis

1.1 Basic Checks

  • WMG had positive earnings in the past year.
  • In the past year WMG had a positive cash flow from operations.
  • Each year in the past 5 years WMG has been profitable.
  • WMG had a positive operating cash flow in each of the past 5 years.
WMG Yearly Net Income VS EBIT VS OCF VS FCFWMG Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 500M

1.2 Ratios

  • With a decent Return On Assets value of 2.99%, WMG is doing good in the industry, outperforming 74.68% of the companies in the same industry.
  • The Return On Equity of WMG (41.52%) is better than 97.47% of its industry peers.
  • WMG's Return On Invested Capital of 13.79% is amongst the best of the industry. WMG outperforms 93.67% of its industry peers.
  • Measured over the past 3 years, the Average Return On Invested Capital for WMG is significantly above the industry average of 7.50%.
  • The 3 year average ROIC (13.09%) for WMG is below the current ROIC(13.79%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 2.99%
ROE 41.52%
ROIC 13.79%
ROA(3y)4.44%
ROA(5y)4.89%
ROE(3y)92.24%
ROE(5y)320.47%
ROIC(3y)13.09%
ROIC(5y)12.66%
WMG Yearly ROA, ROE, ROICWMG Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 200 400 600 800

1.3 Margins

  • WMG's Profit Margin of 4.35% is fine compared to the rest of the industry. WMG outperforms 73.42% of its industry peers.
  • In the last couple of years the Profit Margin of WMG has declined.
  • WMG has a Operating Margin of 14.74%. This is amongst the best in the industry. WMG outperforms 88.61% of its industry peers.
  • In the last couple of years the Operating Margin of WMG has grown nicely.
  • WMG has a Gross Margin of 45.87%. This is comparable to the rest of the industry: WMG outperforms 54.43% of its industry peers.
  • In the last couple of years the Gross Margin of WMG has remained more or less at the same level.
Industry RankSector Rank
OM 14.74%
PM (TTM) 4.35%
GM 45.87%
OM growth 3Y4.68%
OM growth 5YN/A
PM growth 3Y-16.34%
PM growth 5YN/A
GM growth 3Y-1.49%
GM growth 5Y-0.8%
WMG Yearly Profit, Operating, Gross MarginsWMG Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 10 -10 20 30 40

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2

2. WMG Health Analysis

2.1 Basic Checks

  • With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), WMG is creating some value.
  • The number of shares outstanding for WMG has been increased compared to 1 year ago.
  • WMG has more shares outstanding than it did 5 years ago.
  • WMG has a worse debt/assets ratio than last year.
WMG Yearly Shares OutstandingWMG Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 100M 200M 300M 400M 500M
WMG Yearly Total Debt VS Total AssetsWMG Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B 8B

2.2 Solvency

  • WMG has an Altman-Z score of 1.50. This is a bad value and indicates that WMG is not financially healthy and even has some risk of bankruptcy.
  • Looking at the Altman-Z score, with a value of 1.50, WMG is in the better half of the industry, outperforming 60.76% of the companies in the same industry.
  • The Debt to FCF ratio of WMG is 9.50, which is on the high side as it means it would take WMG, 9.50 years of fcf income to pay off all of its debts.
  • WMG has a better Debt to FCF ratio (9.50) than 73.42% of its industry peers.
  • A Debt/Equity ratio of 6.07 is on the high side and indicates that WMG has dependencies on debt financing.
  • WMG has a Debt to Equity ratio of 6.07. This is in the lower half of the industry: WMG underperforms 77.22% of its industry peers.
Industry RankSector Rank
Debt/Equity 6.07
Debt/FCF 9.5
Altman-Z 1.5
ROIC/WACC1.56
WACC8.86%
WMG Yearly LT Debt VS Equity VS FCFWMG Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 1B 2B 3B 4B

2.3 Liquidity

  • WMG has a Current Ratio of 0.70. 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 worse Current ratio (0.70) than 64.56% of its industry peers.
  • WMG has a Quick Ratio of 0.70. This is a bad value and indicates that WMG is not financially healthy enough and could expect problems in meeting its short term obligations.
  • The Quick ratio of WMG (0.69) is worse than 64.56% of its industry peers.
Industry RankSector Rank
Current Ratio 0.7
Quick Ratio 0.69
WMG Yearly Current Assets VS Current LiabilitesWMG Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

5

3. WMG Growth Analysis

3.1 Past

  • WMG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -53.23%.
  • The earnings per share for WMG have been decreasing by -12.92% on average. This is quite bad
  • Looking at the last year, WMG shows a quite strong growth in Revenue. The Revenue has grown by 8.46% in the last year.
  • WMG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.49% yearly.
EPS 1Y (TTM)-53.23%
EPS 3Y-12.92%
EPS 5YN/A
EPS Q2Q%-26.67%
Revenue 1Y (TTM)8.46%
Revenue growth 3Y4.25%
Revenue growth 5Y8.49%
Sales Q2Q%10.44%

3.2 Future

  • Based on estimates for the next years, WMG will show a very strong growth in Earnings Per Share. The EPS will grow by 25.64% on average per year.
  • The Revenue is expected to grow by 6.05% on average over the next years.
EPS Next Y94.72%
EPS Next 2Y57.8%
EPS Next 3Y41.06%
EPS Next 5Y25.64%
Revenue Next Year8.97%
Revenue Next 2Y7.47%
Revenue Next 3Y6.88%
Revenue Next 5Y6.05%

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.
  • 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.
WMG Yearly Revenue VS EstimatesWMG Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2B 4B 6B 8B
WMG Yearly EPS VS EstimatesWMG Yearly EPS VS EstimatesYearly EPS VS Estimates 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0 0.5 -0.5 1 1.5 2

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6

4. WMG Valuation Analysis

4.1 Price/Earnings Ratio

  • Based on the Price/Earnings ratio of 41.64, the valuation of WMG can be described as expensive.
  • Based on the Price/Earnings ratio, WMG is valued a bit cheaper than the industry average as 72.15% of the companies are valued more expensively.
  • WMG's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 25.54.
  • WMG is valuated correctly with a Price/Forward Earnings ratio of 13.85.
  • 84.81% of the companies in the same industry are more expensive than WMG, based on the Price/Forward Earnings ratio.
  • WMG is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.70, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 41.64
Fwd PE 13.85
WMG Price Earnings VS Forward Price EarningsWMG Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

  • Based on the Enterprise Value to EBITDA ratio, WMG is valued a bit cheaper than the industry average as 78.48% of the companies are valued more expensively.
  • Based on the Price/Free Cash Flow ratio, WMG is valued a bit cheaper than 78.48% of the companies in the same industry.
Industry RankSector Rank
P/FCF 27.49
EV/EBITDA 11.5
WMG Per share dataWMG EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 -5 10

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.
  • WMG has an outstanding profitability rating, which may justify a higher PE ratio.
  • WMG's earnings are expected to grow with 41.06% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.44
PEG (5Y)N/A
EPS Next 2Y57.8%
EPS Next 3Y41.06%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

5

5. WMG Dividend Analysis

5.1 Amount

  • WMG has a Yearly Dividend Yield of 2.54%.
  • Compared to an average industry Dividend Yield of 7.67, WMG pays a better dividend. On top of this WMG pays more dividend than 93.67% of the companies listed in the same industry.
  • WMG's Dividend Yield is a higher than the S&P500 average which is at 1.89.
Industry RankSector Rank
Dividend Yield 2.54%

5.2 History

  • The dividend of WMG has a limited annual growth rate of 1.77%.
  • 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)1.77%
Div Incr Years4
Div Non Decr Years4
WMG Yearly Dividends per shareWMG Yearly Dividends per shareYearly Dividends per share 2020 2021 2022 2023 2024 2025 2026 0.2 0.4 0.6

5.3 Sustainability

  • 130.10% of the earnings are spent on dividend by WMG. This is not a sustainable payout ratio.
  • The dividend of WMG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP130.1%
EPS Next 2Y57.8%
EPS Next 3Y41.06%
WMG Yearly Income VS Free CF VS DividendWMG Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 200M -200M 400M -400M 600M 800M
WMG Dividend Payout.WMG Dividend Payout, showing the Payout Ratio.WMG Dividend Payout.PayoutRetained Earnings

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WMG Fundamentals: All Metrics, Ratios and Statistics

WARNER MUSIC GROUP CORP-CL A

NASDAQ:WMG (3/23/2026, 8:24:28 PM)

After market: 24.15 0 (0%)

24.15

+0.26 (+1.09%)

Chartmill FA Rating
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)02-05
Earnings (Next)05-06
Inst Owners106.01%
Inst Owner Change-0.66%
Ins Owners0.9%
Ins Owner Change7.11%
Market Cap12.65B
Revenue(TTM)6.88B
Net Income(TTM)299.00M
Analysts81.67
Price Target38.35 (58.8%)
Short Float %5.79%
Short Ratio3.55
Dividend
Industry RankSector Rank
Dividend Yield 2.54%
Yearly Dividend0.74
Dividend Growth(5Y)1.77%
DP130.1%
Div Incr Years4
Div Non Decr Years4
Ex-Date02-18
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-23.57%
Min EPS beat(2)-37.42%
Max EPS beat(2)-9.72%
EPS beat(4)0
Avg EPS beat(4)-58.18%
Min EPS beat(4)-110.91%
Max EPS beat(4)-9.72%
EPS beat(8)3
Avg EPS beat(8)-23.63%
EPS beat(12)5
Avg EPS beat(12)-19.41%
EPS beat(16)7
Avg EPS beat(16)-7.59%
Revenue beat(2)2
Avg Revenue beat(2)6.37%
Min Revenue beat(2)2.74%
Max Revenue beat(2)10.01%
Revenue beat(4)3
Avg Revenue beat(4)3.66%
Min Revenue beat(4)-3.26%
Max Revenue beat(4)10.01%
Revenue beat(8)4
Avg Revenue beat(8)1.72%
Revenue beat(12)7
Avg Revenue beat(12)2.01%
Revenue beat(16)10
Avg Revenue beat(16)1.73%
PT rev (1m)0.14%
PT rev (3m)-1.11%
EPS NQ rev (1m)-1.18%
EPS NQ rev (3m)-3.9%
EPS NY rev (1m)-2.06%
EPS NY rev (3m)-2.91%
Revenue NQ rev (1m)0.19%
Revenue NQ rev (3m)1%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)1.57%
Valuation
Industry RankSector Rank
PE 41.64
Fwd PE 13.85
P/S 1.84
P/FCF 27.49
P/OCF 16.49
P/B 17.56
P/tB N/A
EV/EBITDA 11.5
EPS(TTM)0.58
EY2.4%
EPS(NY)1.74
Fwd EY7.22%
FCF(TTM)0.88
FCFY3.64%
OCF(TTM)1.46
OCFY6.07%
SpS13.14
BVpS1.38
TBVpS-8
PEG (NY)0.44
PEG (5Y)N/A
Graham Number4.24
Profitability
Industry RankSector Rank
ROA 2.99%
ROE 41.52%
ROCE 17.79%
ROIC 13.79%
ROICexc 15.88%
ROICexgc 1828.08%
OM 14.74%
PM (TTM) 4.35%
GM 45.87%
FCFM 6.69%
ROA(3y)4.44%
ROA(5y)4.89%
ROE(3y)92.24%
ROE(5y)320.47%
ROIC(3y)13.09%
ROIC(5y)12.66%
ROICexc(3y)14.86%
ROICexc(5y)14.42%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)16.89%
ROCE(5y)16.33%
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3Y-0.38%
ROICexc growth 5YN/A
OM growth 3Y4.68%
OM growth 5YN/A
PM growth 3Y-16.34%
PM growth 5YN/A
GM growth 3Y-1.49%
GM growth 5Y-0.8%
F-Score5
Asset Turnover0.69
Health
Industry RankSector Rank
Debt/Equity 6.07
Debt/FCF 9.5
Debt/EBITDA 3.12
Cap/Depr 78.92%
Cap/Sales 4.46%
Interest Coverage 5.42
Cash Conversion 54.67%
Profit Quality 153.85%
Current Ratio 0.7
Quick Ratio 0.69
Altman-Z 1.5
F-Score5
WACC8.86%
ROIC/WACC1.56
Cap/Depr(3y)84.69%
Cap/Depr(5y)107.57%
Cap/Sales(3y)4.56%
Cap/Sales(5y)6%
Profit Quality(3y)101.59%
Profit Quality(5y)80.52%
High Growth Momentum
Growth
EPS 1Y (TTM)-53.23%
EPS 3Y-12.92%
EPS 5YN/A
EPS Q2Q%-26.67%
EPS Next Y94.72%
EPS Next 2Y57.8%
EPS Next 3Y41.06%
EPS Next 5Y25.64%
Revenue 1Y (TTM)8.46%
Revenue growth 3Y4.25%
Revenue growth 5Y8.49%
Sales Q2Q%10.44%
Revenue Next Year8.97%
Revenue Next 2Y7.47%
Revenue Next 3Y6.88%
Revenue Next 5Y6.05%
EBIT growth 1Y16.28%
EBIT growth 3Y9.13%
EBIT growth 5YN/A
EBIT Next Year96.34%
EBIT Next 3Y33.38%
EBIT Next 5Y20.75%
FCF growth 1Y-7.26%
FCF growth 3Y-6.41%
FCF growth 5Y0.18%
OCF growth 1Y-0.52%
OCF growth 3Y-3.11%
OCF growth 5Y7.83%

WARNER MUSIC GROUP CORP-CL A / WMG Fundamental Analysis FAQ

What is the fundamental rating for WMG stock?

ChartMill assigns a fundamental rating of 5 / 10 to WMG.


What is the valuation status of WARNER MUSIC GROUP CORP-CL A (WMG) stock?

ChartMill assigns a valuation rating of 6 / 10 to WARNER MUSIC GROUP CORP-CL A (WMG). This can be considered as Fairly Valued.


What is the profitability of WMG stock?

WARNER MUSIC GROUP CORP-CL A (WMG) has a profitability rating of 8 / 10.


What is the earnings growth outlook for WARNER MUSIC GROUP CORP-CL A?

The Earnings per Share (EPS) of WARNER MUSIC GROUP CORP-CL A (WMG) is expected to grow by 94.72% in the next year.


How sustainable is the dividend of WARNER MUSIC GROUP CORP-CL A (WMG) stock?

The dividend rating of WARNER MUSIC GROUP CORP-CL A (WMG) is 5 / 10 and the dividend payout ratio is 130.1%.