TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - NYSE:TME - US88034P1093 - ADR
23.15 USD
+0.83 (+3.72%)
23.15 USD
0 (0%)
Overall TME gets a fundamental rating of 7 out of 10. We evaluated TME against 79 industry peers in the Entertainment industry. TME has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. TME is not priced too expensively while it is growing strongly. Keep and eye on this one! These ratings could make TME a good candidate for growth and 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.
Each year in the past 5 years TME has been profitable.
Each year in the past 5 years TME had a positive operating cash flow.
1.2 Ratios
TME's Return On Assets of 11.32% is amongst the best of the industry. TME outperforms 89.87% of its industry peers.
TME has a better Return On Equity (15.09%) than 83.54% of its industry peers.
Looking at the Return On Invested Capital, with a value of 9.71%, TME belongs to the top of the industry, outperforming 84.81% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TME is below the industry average of 9.25%.
The 3 year average ROIC (6.52%) for TME is below the current ROIC(9.71%), indicating increased profibility in the last year.
| Industry Rank | Sector 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%
1.3 Margins
Looking at the Profit Margin, with a value of 33.83%, TME belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Profit Margin of TME has grown nicely.
The Operating Margin of TME (28.23%) is better than 96.20% of its industry peers.
In the last couple of years the Operating Margin of TME has grown nicely.
The Gross Margin of TME (43.72%) is comparable to the rest of the industry.
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 just above the Cost of Capital (WACC), which means it is creating some value.
The number of shares outstanding for TME has been reduced compared to 1 year ago.
TME has less shares outstanding than it did 5 years ago.
The debt/assets ratio for TME has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 8.01 indicates that TME is not in any danger for bankruptcy at the moment.
TME has a better Altman-Z score (8.01) than 88.61% of its industry peers.
TME has a debt to FCF ratio of 0.69. This is a very positive value and a sign of high solvency as it would only need 0.69 years to pay back of all of its debts.
TME has a Debt to FCF ratio of 0.69. This is amongst the best in the industry. TME outperforms 84.81% 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 64.56% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.69 | ||
| Altman-Z | 8.01 |
ROIC/WACC1.38
WACC7.06%
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 74.68% 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.
The Quick ratio of TME (2.09) is better than 74.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.09 | ||
| Quick Ratio | 2.09 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 35.73% over the past year.
The Earnings Per Share has been growing by 10.88% on average over the past years. This is quite good.
TME shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 10.52%.
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
Based on estimates for the next years, TME will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.09% on average per year.
TME is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.27% yearly.
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
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
TME is valuated quite expensively with a Price/Earnings ratio of 28.94.
Based on the Price/Earnings ratio, TME is valued a bit cheaper than the industry average as 78.48% 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 26.51, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 23.98, TME is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TME indicates a somewhat cheap valuation: TME is cheaper than 78.48% of the companies listed in the same industry.
TME is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.53, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.94 | ||
| Fwd PE | 23.98 |
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 77.22% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.84 | ||
| EV/EBITDA | 22.01 |
4.3 Compensation for Growth
The 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.
A more expensive valuation may be justified as TME's earnings are expected to grow with 17.39% in the coming years.
PEG (NY)1.61
PEG (5Y)2.66
EPS Next 2Y18.3%
EPS Next 3Y17.39%
5. Dividend
5.1 Amount
TME has a Yearly Dividend Yield of 1.38%. Purely for dividend investing, there may be better candidates out there.
TME's Dividend Yield is rather good when compared to the industry average which is at 40.51. TME pays more dividend than 88.61% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, TME's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.38% |
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 2Y18.3%
EPS Next 3Y17.39%
23.15
+0.83 (+3.72%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners67.61%
Inst Owner Change-0.98%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap35.67B
Revenue(TTM)30.27B
Net Income(TTM)10.24B
Analysts81.18
Price Target27.92 (20.6%)
Short Float %4.64%
Short Ratio2.86
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.38% |
Yearly Dividend0.13
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years1
Div Non Decr Years1
Ex-Date
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)0.98%
PT rev (3m)44.98%
EPS NQ rev (1m)0%
EPS NQ rev (3m)5.68%
EPS NY rev (1m)0%
EPS NY rev (3m)4.17%
Revenue NQ rev (1m)0.28%
Revenue NQ rev (3m)5.02%
Revenue NY rev (1m)0%
Revenue NY rev (3m)3.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.94 | ||
| Fwd PE | 23.98 | ||
| P/S | 8.39 | ||
| P/FCF | 28.84 | ||
| P/OCF | 28.84 | ||
| P/B | 3.74 | ||
| P/tB | 5.5 | ||
| EV/EBITDA | 22.01 |
EPS(TTM)0.8
EY3.46%
EPS(NY)0.97
Fwd EY4.17%
FCF(TTM)0.8
FCFY3.47%
OCF(TTM)0.8
OCFY3.47%
SpS2.76
BVpS6.19
TBVpS4.21
PEG (NY)1.61
PEG (5Y)2.66
Graham Number10.55
Profitability
| Industry Rank | Sector 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%
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 Turnover0.33
Health
| Industry Rank | Sector 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 | 8.01 |
F-Score5
WACC7.06%
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%
TENCENT MUSIC ENTERTAINM-ADR / TME FAQ
What is the fundamental rating for TME stock?
ChartMill assigns a fundamental rating of 7 / 10 to TME.
Can you provide the valuation status for TENCENT MUSIC ENTERTAINM-ADR?
ChartMill assigns a valuation rating of 4 / 10 to TENCENT MUSIC ENTERTAINM-ADR (TME). This can be considered as Fairly Valued.
How profitable is TENCENT MUSIC ENTERTAINM-ADR (TME) stock?
TENCENT MUSIC ENTERTAINM-ADR (TME) has a profitability rating of 8 / 10.
What is the earnings growth outlook for TENCENT MUSIC ENTERTAINM-ADR?
The Earnings per Share (EPS) of TENCENT MUSIC ENTERTAINM-ADR (TME) is expected to grow by 18.01% in the next year.