TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
NYSE:TME • US88034P1093
15.235 USD
-0.05 (-0.36%)
Last: Feb 19, 2026, 12:27 PM
We assign a fundamental rating of 8 out of 10 to TME. TME was compared to 80 industry peers in the Entertainment industry. TME gets an excellent profitability rating and is at the same time showing great financial health properties. TME is growing strongly while it also seems undervalued. This is an interesting combination This makes TME very considerable 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.
- TME had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
- The Return On Assets of TME (9.49%) is better than 88.75% of its industry peers.
- With an excellent Return On Equity value of 12.21%, TME belongs to the best of the industry, outperforming 85.00% of the companies in the same industry.
- TME has a better Return On Invested Capital (7.85%) than 85.00% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for TME is in line with the industry average of 7.77%.
- The last Return On Invested Capital (7.85%) for TME is above the 3 year average (6.52%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.49% | ||
| ROE | 12.21% | ||
| ROIC | 7.85% |
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
- With an excellent Profit Margin value of 33.83%, TME belongs to the best of the industry, outperforming 98.75% of the companies in the same industry.
- TME's Profit Margin has improved in the last couple of years.
- With an excellent Operating Margin value of 28.23%, 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.
- TME has a Gross Margin (43.72%) which is in line with its industry peers.
- In the last couple of years the Gross Margin of TME has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.23% | ||
| PM (TTM) | 33.83% | ||
| GM | 43.72% |
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 below the Cost of Capital (WACC), which means it is destroying value.
- Compared to 1 year ago, TME has less shares outstanding
- Compared to 5 years ago, TME has less shares outstanding
- Compared to 1 year ago, TME has an improved debt to assets ratio.
2.2 Solvency
- An Altman-Z score of 5.50 indicates that TME is not in any danger for bankruptcy at the moment.
- TME has a better Altman-Z score (5.50) than 87.50% of its industry peers.
- The Debt to FCF ratio of TME is 0.69, which is an excellent value as it means it would take TME, only 0.69 years of fcf income to pay off all of its debts.
- TME's Debt to FCF ratio of 0.69 is amongst the best of the industry. TME outperforms 87.50% of its industry peers.
- TME has a Debt/Equity ratio of 0.05. This is a healthy value indicating a solid balance between debt and equity.
- TME has a Debt to Equity ratio of 0.05. This is in the better half of the industry: TME outperforms 66.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.05 | ||
| Debt/FCF | 0.69 | ||
| Altman-Z | 5.5 |
ROIC/WACC0.94
WACC8.31%
2.3 Liquidity
- TME has a Current Ratio of 1.87. This is a normal value and indicates that TME is financially healthy and should not expect problems in meeting its short term obligations.
- TME has a better Current ratio (1.87) than 73.75% of its industry peers.
- TME has a Quick Ratio of 1.87. This is a normal value and indicates that TME is financially healthy and should not expect problems in meeting its short term obligations.
- TME has a better Quick ratio (1.87) than 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.87 | ||
| Quick Ratio | 1.87 |
3. Growth
3.1 Past
- TME shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 36.04%, which is quite impressive.
- Measured over the past years, TME shows a quite strong growth in Earnings Per Share. The EPS has been growing by 10.88% on average per year.
- TME shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 13.95%.
- The Revenue has been growing slightly by 2.23% on average over the past years.
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 16.72% yearly.
- TME is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 14.57% yearly.
EPS Next Y24.17%
EPS Next 2Y18.28%
EPS Next 3Y16.46%
EPS Next 5Y16.72%
Revenue Next Year15.31%
Revenue Next 2Y14.21%
Revenue Next 3Y13.69%
Revenue Next 5Y14.57%
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 17.51, TME is valued on the expensive side.
- Based on the Price/Earnings ratio, TME is valued cheaper than 87.50% of the companies in the same industry.
- TME is valuated rather cheaply when we compare the Price/Earnings ratio to 27.27, which is the current average of the S&P500 Index.
- With a Price/Forward Earnings ratio of 15.32, TME is valued correctly.
- 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.
- When comparing the Price/Forward Earnings ratio of TME to the average of the S&P500 Index (28.16), we can say TME is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.51 | ||
| Fwd PE | 15.32 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TME indicates a somewhat cheap valuation: TME is cheaper than 72.50% of the companies listed in the same industry.
- TME's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TME is cheaper than 87.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.43 | ||
| EV/EBITDA | 14.22 |
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 16.46% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.72
PEG (5Y)1.61
EPS Next 2Y18.28%
EPS Next 3Y16.46%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.03%, 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 7.46. TME pays more dividend than 88.75% of the companies in the same industry.
- TME's Dividend Yield is comparable with the S&P500 average which is at 1.85.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.03% |
5.2 History
- TME does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
DPN/A
EPS Next 2Y18.28%
EPS Next 3Y16.46%
NYSE:TME (2/19/2026, 12:27:49 PM)
15.235
-0.05 (-0.36%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)11-12 2025-11-12/bmo
Earnings (Next)03-18 2026-03-18/amc
Inst Owners62.89%
Inst Owner Change0.79%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap23.48B
Revenue(TTM)31.72B
Net Income(TTM)10.24B
Analysts81.14
Price Target25.96 (70.4%)
Short Float %4.65%
Short Ratio2.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.03% |
Yearly Dividend0.14
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)7.25%
Min EPS beat(2)2.25%
Max EPS beat(2)12.25%
EPS beat(4)3
Avg EPS beat(4)5.56%
Min EPS beat(4)-4.78%
Max EPS beat(4)12.53%
EPS beat(8)7
Avg EPS beat(8)3.76%
EPS beat(12)10
Avg EPS beat(12)5.02%
EPS beat(16)13
Avg EPS beat(16)6.05%
Revenue beat(2)2
Avg Revenue beat(2)2.56%
Min Revenue beat(2)0.15%
Max Revenue beat(2)4.97%
Revenue beat(4)3
Avg Revenue beat(4)1.24%
Min Revenue beat(4)-1.38%
Max Revenue beat(4)4.97%
Revenue beat(8)6
Avg Revenue beat(8)1.28%
Revenue beat(12)9
Avg Revenue beat(12)1.13%
Revenue beat(16)10
Avg Revenue beat(16)0.84%
PT rev (1m)-1.63%
PT rev (3m)-7%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)1.56%
EPS NY rev (3m)4.87%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.01%
Revenue NY rev (3m)0.82%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.51 | ||
| Fwd PE | 15.32 | ||
| P/S | 5.36 | ||
| P/FCF | 18.43 | ||
| P/OCF | 18.43 | ||
| P/B | 1.93 | ||
| P/tB | 2.69 | ||
| EV/EBITDA | 14.22 |
EPS(TTM)0.87
EY5.71%
EPS(NY)0.99
Fwd EY6.53%
FCF(TTM)0.83
FCFY5.43%
OCF(TTM)0.83
OCFY5.43%
SpS2.84
BVpS7.88
TBVpS5.67
PEG (NY)0.72
PEG (5Y)1.61
Graham Number12.42
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.49% | ||
| ROE | 12.21% | ||
| ROCE | 9.35% | ||
| ROIC | 7.85% | ||
| ROICexc | 10.37% | ||
| ROICexgc | 15.71% | ||
| OM | 28.23% | ||
| PM (TTM) | 33.83% | ||
| GM | 43.72% | ||
| FCFM | 29.08% |
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 Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.05 | ||
| Debt/FCF | 0.69 | ||
| Debt/EBITDA | 0.4 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 92.44% | ||
| Profit Quality | 85.96% | ||
| Current Ratio | 1.87 | ||
| Quick Ratio | 1.87 | ||
| Altman-Z | 5.5 |
F-Score5
WACC8.31%
ROIC/WACC0.94
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 Y24.17%
EPS Next 2Y18.28%
EPS Next 3Y16.46%
EPS Next 5Y16.72%
Revenue 1Y (TTM)13.95%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%20.64%
Revenue Next Year15.31%
Revenue Next 2Y14.21%
Revenue Next 3Y13.69%
Revenue Next 5Y14.57%
EBIT growth 1Y43.69%
EBIT growth 3Y39.33%
EBIT growth 5Y13.34%
EBIT Next Year51.29%
EBIT Next 3Y23.21%
EBIT Next 5Y22.4%
FCF growth 1Y14.83%
FCF growth 3Y55.02%
FCF growth 5Y9.34%
OCF growth 1Y14.83%
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 8 / 10 to TME.
What is the valuation status of TENCENT MUSIC ENTERTAINM-ADR (TME) stock?
ChartMill assigns a valuation rating of 7 / 10 to TENCENT MUSIC ENTERTAINM-ADR (TME). This can be considered as Undervalued.
How profitable is TENCENT MUSIC ENTERTAINM-ADR (TME) stock?
TENCENT MUSIC ENTERTAINM-ADR (TME) has a profitability rating of 9 / 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 17.51 and the Price/Book (PB) ratio is 1.93.
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 24.17% in the next year.