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TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis

USA - NYSE:TME - US88034P1093 - ADR

22.635 USD
-0.1 (-0.46%)
Last: 10/21/2025, 3:31:00 PM
Fundamental Rating

7

TME gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 80 industry peers in the Entertainment industry. TME scores excellent points on both the profitability and health parts. This is a solid base for a good stock. TME is not priced too expensively while it is growing strongly. Keep and eye on this one! This makes TME very considerable for growth and quality investing!


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

In the past year TME was profitable.
TME had a positive operating cash flow in the past year.
TME had positive earnings in each of the past 5 years.
Each year in the past 5 years TME had a positive operating cash flow.
TME Yearly Net Income VS EBIT VS OCF VS FCFTME 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 2B 4B 6B 8B 10B

1.2 Ratios

Looking at the Return On Assets, with a value of 11.32%, TME belongs to the top of the industry, outperforming 90.00% of the companies in the same industry.
TME has a better Return On Equity (15.09%) than 83.75% of its industry peers.
The Return On Invested Capital of TME (9.71%) is better than 85.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TME is below the industry average of 9.23%.
The 3 year average ROIC (6.52%) for TME is below the current ROIC(9.71%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 11.32%
ROE 15.09%
ROIC 9.71%
ROA(3y)6.45%
ROA(5y)5.99%
ROE(3y)8.75%
ROE(5y)8.04%
ROIC(3y)6.52%
ROIC(5y)5.78%
TME Yearly ROA, ROE, ROICTME Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2 4 6 8

1.3 Margins

TME's Profit Margin of 33.83% is amongst the best of the industry. TME outperforms 100.00% of its industry peers.
TME's Profit Margin has improved in the last couple of years.
The Operating Margin of TME (28.23%) is better than 96.25% of its industry peers.
TME's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 43.72%, TME is in line with its industry, outperforming 51.25% of the companies in the same industry.
TME's Gross Margin has improved in the last couple of years.
Industry RankSector 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%
TME Yearly Profit, Operating, Gross MarginsTME Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40

9

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.
Compared to 1 year ago, TME has less shares outstanding
The number of shares outstanding for TME has been reduced compared to 5 years ago.
TME has a better debt/assets ratio than last year.
TME Yearly Shares OutstandingTME Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B
TME Yearly Total Debt VS Total AssetsTME Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B 80B

2.2 Solvency

TME has an Altman-Z score of 8.14. This indicates that TME is financially healthy and has little risk of bankruptcy at the moment.
TME's Altman-Z score of 8.14 is amongst the best of the industry. TME outperforms 88.75% 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 85.00% of its industry peers.
TME has a Debt/Equity ratio of 0.06. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.06, TME is in the better half of the industry, outperforming 65.00% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.06
Debt/FCF 0.69
Altman-Z 8.14
ROIC/WACC1.38
WACC7.05%
TME Yearly LT Debt VS Equity VS FCFTME Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B

2.3 Liquidity

A Current Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
TME has a Current ratio of 2.09. This is in the better half of the industry: TME outperforms 75.00% of its industry peers.
TME has a Quick Ratio of 2.09. This indicates that TME is financially healthy and has no problem in meeting its short term obligations.
With a decent Quick ratio value of 2.09, TME is doing good in the industry, outperforming 76.25% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2.09
Quick Ratio 2.09
TME Yearly Current Assets VS Current LiabilitesTME Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B

7

3. Growth

3.1 Past

TME shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 35.73%, which is quite impressive.
TME shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.88% yearly.
Looking at the last year, TME shows a quite strong growth in Revenue. The Revenue has grown by 10.52% in the last year.
TME shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.23% yearly.
EPS 1Y (TTM)35.73%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%39.5%
Revenue 1Y (TTM)10.52%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%17.91%

3.2 Future

The Earnings Per Share is expected to grow by 17.09% on average over the next years. This is quite good.
Based on estimates for the next years, TME will show a quite strong growth in Revenue. The Revenue will grow by 15.27% on average per year.
EPS Next Y18.01%
EPS Next 2Y18.3%
EPS Next 3Y17.39%
EPS Next 5Y17.09%
Revenue Next Year14.32%
Revenue Next 2Y14.28%
Revenue Next 3Y13.42%
Revenue Next 5Y15.27%

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 accelerating.
TME Yearly Revenue VS EstimatesTME Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 20B 40B 60B
TME Yearly EPS VS EstimatesTME Yearly EPS VS EstimatesYearly EPS VS Estimates 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 5 10 15

4

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 28.65, which means the current valuation is very expensive for TME.
Based on the Price/Earnings ratio, TME is valued a bit cheaper than the industry average as 78.75% of the companies are valued more expensively.
TME is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.69, which is the current average of the S&P500 Index.
TME is valuated rather expensively with a Price/Forward Earnings ratio of 23.47.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TME indicates a somewhat cheap valuation: TME is cheaper than 78.75% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.18, TME is valued at the same level.
Industry RankSector Rank
PE 28.65
Fwd PE 23.47
TME Price Earnings VS Forward Price EarningsTME Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 10 20 30 40 50

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TME is on the same level as its industry peers.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TME indicates a somewhat cheap valuation: TME is cheaper than 78.75% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 28.23
EV/EBITDA 22.52
TME Per share dataTME EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6

4.3 Compensation for Growth

TME's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The excellent profitability rating of TME may justify a higher PE ratio.
TME's earnings are expected to grow with 17.39% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.59
PEG (5Y)2.63
EPS Next 2Y18.3%
EPS Next 3Y17.39%

2

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 1.36%, TME has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 38.93, TME pays a better dividend. On top of this TME pays more dividend than 88.75% of the companies listed in the same industry.
With a Dividend Yield of 1.36, TME pays less dividend than the S&P500 average, which is at 2.34.
Industry RankSector Rank
Dividend Yield 1.36%

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
TME Yearly Dividends per shareTME Yearly Dividends per shareYearly Dividends per share 2024 2025 0.05 0.1 0.15

5.3 Sustainability

DPN/A
EPS Next 2Y18.3%
EPS Next 3Y17.39%
TME Yearly Income VS Free CF VS DividendTME Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B 8B

TENCENT MUSIC ENTERTAINM-ADR

NYSE:TME (10/21/2025, 3:31:00 PM)

22.635

-0.1 (-0.46%)

Chartmill FA Rating
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)08-12 2025-08-12/bmo
Earnings (Next)11-12 2025-11-12/bmo
Inst Owners67.61%
Inst Owner Change-0.14%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap34.88B
Analysts81.18
Price Target28 (23.7%)
Short Float %5.28%
Short Ratio2.8
Dividend
Industry RankSector Rank
Dividend Yield 1.36%
Yearly Dividend0.13
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years1
Div Non Decr Years1
Ex-Date04-03 2025-04-03 (0.18)
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)1.3%
PT rev (3m)45.43%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.48%
EPS NY rev (1m)0.06%
EPS NY rev (3m)4.17%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)4.73%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.37%
Valuation
Industry RankSector Rank
PE 28.65
Fwd PE 23.47
P/S 8.21
P/FCF 28.23
P/OCF 28.23
P/B 3.66
P/tB 5.38
EV/EBITDA 22.52
EPS(TTM)0.79
EY3.49%
EPS(NY)0.96
Fwd EY4.26%
FCF(TTM)0.8
FCFY3.54%
OCF(TTM)0.8
OCFY3.54%
SpS2.76
BVpS6.18
TBVpS4.21
PEG (NY)1.59
PEG (5Y)2.63
Profitability
Industry RankSector Rank
ROA 11.32%
ROE 15.09%
ROCE 11.56%
ROIC 9.71%
ROICexc 15.37%
ROICexgc 28.71%
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%
ROICexcg growth 3Y16.02%
ROICexcg 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 Turnover0.33
Health
Industry RankSector Rank
Debt/Equity 0.06
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 2.09
Quick Ratio 2.09
Altman-Z 8.14
F-Score5
WACC7.05%
ROIC/WACC1.38
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)35.73%
EPS 3Y25.91%
EPS 5Y10.88%
EPS Q2Q%39.5%
EPS Next Y18.01%
EPS Next 2Y18.3%
EPS Next 3Y17.39%
EPS Next 5Y17.09%
Revenue 1Y (TTM)10.52%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%17.91%
Revenue Next Year14.32%
Revenue Next 2Y14.28%
Revenue Next 3Y13.42%
Revenue Next 5Y15.27%
EBIT growth 1Y43.69%
EBIT growth 3Y39.33%
EBIT growth 5Y13.34%
EBIT Next Year50.31%
EBIT Next 3Y25.28%
EBIT Next 5Y22.78%
FCF growth 1Y14.83%
FCF growth 3Y55.02%
FCF growth 5Y9.34%
OCF growth 1Y14.83%
OCF growth 3Y25.17%
OCF growth 5Y10.63%