TENCENT MUSIC ENTERTAINM-ADR (TME)
US88034P1093 - ADR
Taking everything into account, TME scores 7 out of 10 in our fundamental rating. TME was compared to 76 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 has a decent growth rate and is not valued too expensively. These ratings could make TME a good candidate for quality investing.
1. Profitability
1.1 Basic Checks
In the past year TME was profitable.
TME had a positive operating cash flow in the past year.
In the past 5 years TME has always been profitable.
Each year in the past 5 years TME had a positive operating cash flow.
1.2 Ratios
The Return On Assets of TME (6.51%) is better than 88.16% of its industry peers.
TME has a Return On Equity of 8.80%. This is amongst the best in the industry. TME outperforms 82.89% of its industry peers.
TME's Return On Invested Capital of 6.55% is amongst the best of the industry. TME outperforms 81.58% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TME is significantly below the industry average of 36.52%.
The 3 year average ROIC (5.26%) for TME is below the current ROIC(6.55%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.51% | ||
| ROE | 8.8% | ||
| ROIC | 6.55% |
ROA(3y)5.5%
ROA(5y)6.03%
ROE(3y)7.49%
ROE(5y)7.91%
ROIC(3y)5.26%
ROIC(5y)5.81%
1.3 Margins
TME has a better Profit Margin (17.73%) than 90.79% of its industry peers.
In the last couple of years the Profit Margin of TME has grown nicely.
TME has a Operating Margin of 17.21%. This is amongst the best in the industry. TME outperforms 86.84% of its industry peers.
TME's Operating Margin has been stable in the last couple of years.
TME's Gross Margin of 35.29% is in line compared to the rest of the industry. TME outperforms 46.05% of its industry peers.
In the last couple of years the Gross Margin of TME has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.21% | ||
| PM (TTM) | 17.73% | ||
| GM | 35.29% |
OM growth 3Y10.43%
OM growth 5Y-0.23%
PM growth 3Y7.55%
PM growth 5Y12.92%
GM growth 3Y3.42%
GM growth 5Y-1.64%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), TME is destroying value.
Compared to 1 year ago, TME has about the same amount of shares outstanding.
Compared to 5 years ago, TME has more shares outstanding
The debt/assets ratio for TME has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 6.38 indicates that TME is not in any danger for bankruptcy at the moment.
The Altman-Z score of TME (6.38) is better than 92.11% of its industry peers.
TME has a debt to FCF ratio of 0.98. This is a very positive value and a sign of high solvency as it would only need 0.98 years to pay back of all of its debts.
The Debt to FCF ratio of TME (0.98) is better than 92.11% of its industry peers.
TME has a Debt/Equity ratio of 0.11. This is a healthy value indicating a solid balance between debt and equity.
TME's Debt to Equity ratio of 0.11 is fine compared to the rest of the industry. TME outperforms 65.79% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.11 | ||
| Debt/FCF | 0.98 | ||
| Altman-Z | 6.38 |
ROIC/WACC0.88
WACC7.43%
2.3 Liquidity
TME has a Current Ratio of 2.49. This indicates that TME is financially healthy and has no problem in meeting its short term obligations.
TME has a better Current ratio (2.49) than 75.00% of its industry peers.
A Quick Ratio of 2.49 indicates that TME has no problem at all paying its short term obligations.
TME's Quick ratio of 2.49 is fine compared to the rest of the industry. TME outperforms 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.49 | ||
| Quick Ratio | 2.49 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 27.55% over the past year.
The Earnings Per Share has been growing by 22.63% on average over the past years. This is a very strong growth
TME shows a decrease in Revenue. In the last year, the revenue decreased by -2.07%.
The Revenue has been growing slightly by 7.89% on average over the past years.
EPS 1Y (TTM)27.55%
EPS 3Y8.33%
EPS 5Y22.63%
EPS growth Q2Q9.89%
Revenue 1Y (TTM)-2.07%
Revenue growth 3Y-1.63%
Revenue growth 5Y7.89%
Revenue growth Q2Q-7.16%
3.2 Future
Based on estimates for the next years, TME will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.07% on average per year.
The Revenue is expected to grow by 8.64% on average over the next years. This is quite good.
EPS Next Y19.7%
EPS Next 2Y19.43%
EPS Next 3Y20.65%
EPS Next 5Y16.07%
Revenue Next Year4.06%
Revenue Next 2Y7.95%
Revenue Next 3Y8.71%
Revenue Next 5Y8.64%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 25.73, the valuation of TME can be described as expensive.
Based on the Price/Earnings ratio, TME is valued a bit cheaper than the industry average as 78.95% 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 28.31, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 21.55, which indicates a rather expensive current valuation of TME.
Based on the Price/Forward Earnings ratio, TME is valued cheaply inside the industry as 81.58% of the companies are valued more expensively.
TME is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 20.48, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.73 | ||
| Fwd PE | 21.55 |
4.2 Price Multiples
60.53% of the companies in the same industry are more expensive than TME, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TME indicates a somewhat cheap valuation: TME is cheaper than 77.63% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.89 | ||
| EV/EBITDA | 26.03 |
4.3 Compensation for Growth
TME's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
TME has an outstanding profitability rating, which may justify a higher PE ratio.
TME's earnings are expected to grow with 20.65% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.31
PEG (5Y)1.14
EPS Next 2Y19.43%
EPS Next 3Y20.65%
5. Dividend
5.1 Amount
No dividends for TME!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
TENCENT MUSIC ENTERTAINM-ADR
NYSE:TME (5/9/2024, 7:22:21 PM)
Premarket: 13.38 0 (0%)13.38
+0.13 (+0.98%)
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 Cap22.96B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
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)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.73 | ||
| Fwd PE | 21.55 | ||
| 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)1.31
PEG (5Y)1.14
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.51% | ||
| ROE | 8.8% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 17.21% | ||
| PM (TTM) | 17.73% | ||
| GM | 35.29% | ||
| 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 Turnover0.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.11 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 2.49 | ||
| Quick Ratio | 2.49 | ||
| 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)
Growth
EPS 1Y (TTM)27.55%
EPS 3Y8.33%
EPS 5Y
EPS growth Q2Q
EPS Next Y19.7%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-2.07%
Revenue growth 3Y-1.63%
Revenue growth 5Y
Revenue growth 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