TENCENT MUSIC ENTERTAINM-ADR (TME) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TME - US88034P1093 - ADR
17.53 USD
-0.13 (-0.74%)
17.53 USD
0 (0%)
We assign a fundamental rating of 7 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 not overvalued while it is showing excellent growth. This is an interesting combination. This makes TME very considerable for 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.
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 has a better Return On Assets (11.95%) than 91.25% of its industry peers.
TME has a Return On Equity of 15.93%. This is amongst the best in the industry. TME outperforms 86.25% of its industry peers.
TME's Return On Invested Capital of 10.39% is amongst the best of the industry. TME outperforms 87.50% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TME is below the industry average of 8.70%.
The last Return On Invested Capital (10.39%) for TME is above the 3 year average (6.52%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.95% | ||
| ROE | 15.93% | ||
| ROIC | 10.39% |
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 34.08%, TME belongs to the best of the industry, outperforming 100.00% 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 28.82%, TME belongs to the best of the industry, outperforming 96.25% of the companies in the same industry.
In the last couple of years the Operating Margin of TME has grown nicely.
With a Gross Margin value of 43.90%, TME perfoms like the industry average, outperforming 51.25% of the companies in the same industry.
TME's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 28.82% | ||
| PM (TTM) | 34.08% | ||
| GM | 43.9% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TME is still creating some value.
The number of shares outstanding for TME has been reduced compared to 1 year ago.
Compared to 5 years ago, TME has less shares outstanding
TME has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.60 indicates that TME is not in any danger for bankruptcy at the moment.
TME has a Altman-Z score of 6.60. This is amongst the best in the industry. TME outperforms 86.25% of its industry peers.
TME has a debt to FCF ratio of 0.59. This is a very positive value and a sign of high solvency as it would only need 0.59 years to pay back of all of its debts.
TME has a Debt to FCF ratio of 0.59. This is amongst the best in the industry. TME outperforms 87.50% 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.
With a decent Debt to Equity ratio value of 0.06, TME is doing good in the industry, outperforming 66.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Altman-Z | 6.6 |
ROIC/WACC1.11
WACC9.34%
2.3 Liquidity
A Current Ratio of 2.09 indicates that TME has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.09, TME is in the better half of the industry, outperforming 76.25% of the companies in the same industry.
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.
TME has a better Quick ratio (2.09) than 76.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.09 | ||
| Quick Ratio | 2.09 |
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.
TME shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.88% yearly.
The Revenue has grown by 13.95% in the past year. This is quite good.
Measured over the past years, TME shows a small growth in Revenue. The Revenue has been growing by 2.23% on average per year.
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
The Earnings Per Share is expected to grow by 17.33% on average over the next years. This is quite good.
TME is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 15.04% yearly.
EPS Next Y22.26%
EPS Next 2Y18.33%
EPS Next 3Y16.43%
EPS Next 5Y17.33%
Revenue Next Year15.28%
Revenue Next 2Y14.16%
Revenue Next 3Y13.65%
Revenue Next 5Y15.04%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 20.38, the valuation of TME can be described as rather expensive.
Based on the Price/Earnings ratio, TME is valued a bit cheaper than 80.00% of the companies in the same industry.
TME's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.51.
A Price/Forward Earnings ratio of 17.83 indicates a rather expensive valuation of TME.
85.00% of the companies in the same industry are more expensive than TME, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 23.13. TME is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.38 | ||
| Fwd PE | 17.83 |
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 67.50% 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 86.25% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.3 | ||
| EV/EBITDA | 15.33 |
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.
TME has an outstanding profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as TME's earnings are expected to grow with 16.43% in the coming years.
PEG (NY)0.92
PEG (5Y)1.87
EPS Next 2Y18.33%
EPS Next 3Y16.43%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.74%, TME has a reasonable but not impressive dividend return.
The stock price of TME dropped by -23.45% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 8.00, TME pays a better dividend. On top of this TME pays more dividend than 88.75% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.00, TME has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
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 2Y18.33%
EPS Next 3Y16.43%
17.53
-0.13 (-0.74%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners62.48%
Inst Owner Change-5.63%
Ins OwnersN/A
Ins Owner ChangeN/A
Market Cap27.01B
Revenue(TTM)31.72B
Net Income(TTM)10.81B
Analysts80.57
Price Target26.39 (50.54%)
Short Float %4.01%
Short Ratio2.63
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
Yearly Dividend0.13
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)6.17%
Min EPS beat(2)0.1%
Max EPS beat(2)12.25%
EPS beat(4)4
Avg EPS beat(4)6.78%
Min EPS beat(4)0.1%
Max EPS beat(4)12.53%
EPS beat(8)7
Avg EPS beat(8)3.77%
EPS beat(12)10
Avg EPS beat(12)3.33%
EPS beat(16)13
Avg EPS beat(16)4.55%
Revenue beat(2)2
Avg Revenue beat(2)3.43%
Min Revenue beat(2)1.88%
Max Revenue beat(2)4.97%
Revenue beat(4)4
Avg Revenue beat(4)2.05%
Min Revenue beat(4)0.15%
Max Revenue beat(4)4.97%
Revenue beat(8)6
Avg Revenue beat(8)1.12%
Revenue beat(12)9
Avg Revenue beat(12)1.03%
Revenue beat(16)11
Avg Revenue beat(16)1.05%
PT rev (1m)-1.25%
PT rev (3m)-4.54%
EPS NQ rev (1m)0.11%
EPS NQ rev (3m)-0.32%
EPS NY rev (1m)3.27%
EPS NY rev (3m)3.61%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.78%
Revenue NY rev (1m)0.79%
Revenue NY rev (3m)0.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.38 | ||
| Fwd PE | 17.83 | ||
| P/S | 5.96 | ||
| P/FCF | 18.3 | ||
| P/OCF | 18.3 | ||
| P/B | 2.78 | ||
| P/tB | 4.09 | ||
| EV/EBITDA | 15.33 |
EPS(TTM)0.86
EY4.91%
EPS(NY)0.98
Fwd EY5.61%
FCF(TTM)0.96
FCFY5.46%
OCF(TTM)0.96
OCFY5.46%
SpS2.94
BVpS6.3
TBVpS4.28
PEG (NY)0.92
PEG (5Y)1.87
Graham Number11.04
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 11.95% | ||
| ROE | 15.93% | ||
| ROCE | 12.37% | ||
| ROIC | 10.39% | ||
| ROICexc | 16.44% | ||
| ROICexgc | 30.72% | ||
| OM | 28.82% | ||
| PM (TTM) | 34.08% | ||
| GM | 43.9% | ||
| FCFM | 32.54% |
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 Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.06 | ||
| Debt/FCF | 0.59 | ||
| Debt/EBITDA | 0.37 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 101.98% | ||
| Profit Quality | 95.47% | ||
| Current Ratio | 2.09 | ||
| Quick Ratio | 2.09 | ||
| Altman-Z | 6.6 |
F-Score5
WACC9.34%
ROIC/WACC1.11
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 Y22.26%
EPS Next 2Y18.33%
EPS Next 3Y16.43%
EPS Next 5Y17.33%
Revenue 1Y (TTM)13.95%
Revenue growth 3Y-3.13%
Revenue growth 5Y2.23%
Sales Q2Q%20.64%
Revenue Next Year15.28%
Revenue Next 2Y14.16%
Revenue Next 3Y13.65%
Revenue Next 5Y15.04%
EBIT growth 1Y37.58%
EBIT growth 3Y39.33%
EBIT growth 5Y13.34%
EBIT Next Year51.35%
EBIT Next 3Y23.15%
EBIT Next 5Y22.9%
FCF growth 1Y31.4%
FCF growth 3Y55.02%
FCF growth 5Y9.34%
OCF growth 1Y31.4%
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.
What is the valuation status of TENCENT MUSIC ENTERTAINM-ADR (TME) stock?
ChartMill assigns a valuation rating of 6 / 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 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 20.38 and the Price/Book (PB) ratio is 2.78.
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 22.26% in the next year.