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 is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
WMG had positive earnings in the past year.
In the past year WMG had a positive cash flow from operations.
WMG had positive earnings in 4 of the past 5 years.
Each year in the past 5 years WMG had a positive operating cash flow.
1.2 Ratios
WMG's Return On Assets of 6.10% is amongst the best of the industry. WMG outperforms 81.69% of its industry peers.
With an excellent Return On Equity value of 111.59%, WMG belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
WMG has a better Return On Invested Capital (13.36%) than 90.14% of its industry peers.
WMG had an Average Return On Invested Capital over the past 3 years of 11.46%. This is significantly below the industry average of 88.68%.
The last Return On Invested Capital (13.36%) for WMG is above the 3 year average (11.46%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.1% | ||
| ROE | 111.59% | ||
| ROIC | 13.36% |
ROA(3y)5.36%
ROA(5y)2.58%
ROE(3y)487.92%
ROE(5y)N/A
ROIC(3y)11.46%
ROIC(5y)N/A
1.3 Margins
The Profit Margin of WMG (8.45%) is better than 83.10% of its industry peers.
In the last couple of years the Profit Margin of WMG has declined.
WMG's Operating Margin of 14.96% is amongst the best of the industry. WMG outperforms 84.51% of its industry peers.
In the last couple of years the Operating Margin of WMG has grown nicely.
With a Gross Margin value of 47.57%, WMG perfoms like the industry average, outperforming 57.75% of the companies in the same industry.
In the last couple of years the Gross Margin of WMG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.96% | ||
| PM (TTM) | 8.45% | ||
| GM | 47.57% |
OM growth 3YN/A
OM growth 5Y19.26%
PM growth 3YN/A
PM growth 5Y-1.73%
GM growth 3Y-0.25%
GM growth 5Y0.68%
2. Health
2.1 Basic Checks
WMG has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, WMG has more shares outstanding
Compared to 5 years ago, WMG has more shares outstanding
WMG has a better debt/assets ratio than last year.
2.2 Solvency
WMG has an Altman-Z score of 1.99. This is not the best score and indicates that WMG is in the grey zone with still only limited risk for bankruptcy at the moment.
WMG's Altman-Z score of 1.99 is fine compared to the rest of the industry. WMG outperforms 69.01% of its industry peers.
The Debt to FCF ratio of WMG is 8.24, which is on the high side as it means it would take WMG, 8.24 years of fcf income to pay off all of its debts.
WMG has a Debt to FCF ratio of 8.24. This is in the better half of the industry: WMG outperforms 67.61% of its industry peers.
A Debt/Equity ratio of 8.24 is on the high side and indicates that WMG has dependencies on debt financing.
WMG has a worse Debt to Equity ratio (8.24) than 80.28% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.24 | ||
| Debt/FCF | 8.24 | ||
| Altman-Z | 1.99 |
ROIC/WACC1.69
WACC7.89%
2.3 Liquidity
WMG has a Current Ratio of 0.69. This is a bad value and indicates that WMG is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.69, WMG is not doing good in the industry: 66.20% of the companies in the same industry are doing better.
WMG has a Quick Ratio of 0.69. This is a bad value and indicates that WMG is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.67, WMG is not doing good in the industry: 66.20% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.67 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 72.50% over the past year.
WMG shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.45% yearly.
Looking at the last year, WMG shows a small growth in Revenue. The Revenue has grown by 7.30% in the last year.
The Revenue has been growing by 8.55% on average over the past years. This is quite good.
EPS 1Y (TTM)72.5%
EPS 3YN/A
EPS 5Y6.45%
EPS Q2Q%39.13%
Revenue 1Y (TTM)7.3%
Revenue growth 3Y10.59%
Revenue growth 5Y8.55%
Sales Q2Q%-0.64%
3.2 Future
WMG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 21.88% yearly.
Based on estimates for the next years, WMG will show a small growth in Revenue. The Revenue will grow by 7.62% on average per year.
EPS Next Y27.11%
EPS Next 2Y28.48%
EPS Next 3Y23.78%
EPS Next 5Y21.88%
Revenue Next Year5.9%
Revenue Next 2Y5.15%
Revenue Next 3Y5.75%
Revenue Next 5Y7.62%
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 stable.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 22.59, which indicates a rather expensive current valuation of WMG.
Based on the Price/Earnings ratio, WMG is valued a bit cheaper than 74.65% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.96, WMG is valued a bit cheaper.
The Price/Forward Earnings ratio is 21.97, which indicates a rather expensive current valuation of WMG.
Based on the Price/Forward Earnings ratio, WMG is valued a bit cheaper than 71.83% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.82. WMG is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.59 | ||
| Fwd PE | 21.97 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, WMG is valued a bit cheaper than the industry average as 64.79% of the companies are valued more expensively.
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 | 33.43 | ||
| EV/EBITDA | 16.28 |
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 a very decent profitability rating, which may justify a higher PE ratio.
WMG's earnings are expected to grow with 23.77% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.83
PEG (5Y)3.5
EPS Next 2Y28.48%
EPS Next 3Y23.78%
5. Dividend
5.1 Amount
WMG has a Yearly Dividend Yield of 2.16%. Purely for dividend investing, there may be better candidates out there.
WMG's Dividend Yield is rather good when compared to the industry average which is at 3.61. 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 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.16% |
5.2 History
The dividend of WMG decreases each year by -18.31%.
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)-18.31%
Div Incr Years3
Div Non Decr Years3
5.3 Sustainability
66.05% of the earnings are spent on dividend by WMG. This is not a sustainable payout ratio.
DP66.05%
EPS Next 2Y28.48%
EPS Next 3Y23.78%
WARNER MUSIC GROUP CORP-CL A
NASDAQ:WMG (11/21/2024, 5:20:02 PM)
After market: 31.18 0 (0%)31.18
-2.49 (-7.4%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap16.15B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.16% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
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PT rev (1m)
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EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.59 | ||
| Fwd PE | 21.97 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)0.83
PEG (5Y)3.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.1% | ||
| ROE | 111.59% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 14.96% | ||
| PM (TTM) | 8.45% | ||
| GM | 47.57% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.72
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.24 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.67 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)72.5%
EPS 3YN/A
EPS 5Y
EPS Q2Q%
EPS Next Y27.11%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)7.3%
Revenue growth 3Y10.59%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y