28.35 USD
-0.63 (-2.17%)
28.33 USD
-0.02 (-0.07%)
Taking everything into account, WMG scores 4 out of 10 in our fundamental rating. WMG was compared to 80 industry peers in the Entertainment industry. WMG has an excellent profitability rating, but there are concerns on its financial health. WMG has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
WMG had positive earnings in the past year.
WMG had a positive operating cash flow in the past year.
Each year in the past 5 years WMG has been profitable.
Each year in the past 5 years WMG had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 3.64%, WMG is in the better half of the industry, outperforming 76.25% of the companies in the same industry.
WMG has a better Return On Equity (55.33%) than 97.50% of its industry peers.
WMG's Return On Invested Capital of 12.78% is amongst the best of the industry. WMG outperforms 88.75% of its industry peers.
The Average Return On Invested Capital over the past 3 years for WMG is above the industry average of 9.33%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.64% | ||
| ROE | 55.33% | ||
| ROIC | 12.78% |
ROA(3y)4.44%
ROA(5y)4.89%
ROE(3y)92.24%
ROE(5y)320.47%
ROIC(3y)13.09%
ROIC(5y)12.66%
1.3 Margins
WMG has a Profit Margin of 5.34%. This is in the better half of the industry: WMG outperforms 72.50% of its industry peers.
WMG's Profit Margin has declined in the last couple of years.
The Operating Margin of WMG (13.84%) is better than 81.25% of its industry peers.
In the last couple of years the Operating Margin of WMG has grown nicely.
Looking at the Gross Margin, with a value of 45.85%, WMG is in line with its industry, outperforming 55.00% of the companies in the same industry.
WMG's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.84% | ||
| PM (TTM) | 5.34% | ||
| GM | 45.85% |
OM growth 3Y4.68%
OM growth 5YN/A
PM growth 3Y-16.34%
PM growth 5YN/A
GM growth 3Y-1.49%
GM growth 5Y-0.8%
2. Health
2.1 Basic Checks
WMG 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 WMG has been increased compared to 1 year ago.
WMG has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, WMG has a worse debt to assets ratio.
2.2 Solvency
WMG has an Altman-Z score of 1.60. This is a bad value and indicates that WMG is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.60, WMG is in line with its industry, outperforming 56.25% of the companies in the same industry.
WMG has a debt to FCF ratio of 12.80. This is a negative value and a sign of low solvency as WMG would need 12.80 years to pay back of all of its debts.
WMG's Debt to FCF ratio of 12.80 is in line compared to the rest of the industry. WMG outperforms 58.75% of its industry peers.
WMG has a Debt/Equity ratio of 6.75. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 6.75, WMG is doing worse than 78.75% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.75 | ||
| Debt/FCF | 12.8 | ||
| Altman-Z | 1.6 |
ROIC/WACC1.71
WACC7.48%
2.3 Liquidity
A Current Ratio of 0.66 indicates that WMG may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.66, WMG is doing worse than 73.75% of the companies in the same industry.
A Quick Ratio of 0.64 indicates that WMG may have some problems paying its short term obligations.
WMG has a Quick ratio of 0.64. This is in the lower half of the industry: WMG underperforms 70.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.64 |
3. Growth
3.1 Past
WMG shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -37.50%.
The earnings per share for WMG have been decreasing by -12.92% on average. This is quite bad
The Revenue has been growing slightly by 4.37% in the past year.
Measured over the past years, WMG shows a quite strong growth in Revenue. The Revenue has been growing by 8.49% on average per year.
EPS 1Y (TTM)-37.5%
EPS 3Y-12.92%
EPS 5YN/A
EPS Q2Q%162.5%
Revenue 1Y (TTM)4.37%
Revenue growth 3Y4.25%
Revenue growth 5Y8.49%
Sales Q2Q%14.6%
3.2 Future
Based on estimates for the next years, WMG will show a very strong growth in Earnings Per Share. The EPS will grow by 25.18% on average per year.
The Revenue is expected to grow by 5.95% on average over the next years.
EPS Next Y94.29%
EPS Next 2Y52.93%
EPS Next 3Y39.1%
EPS Next 5Y25.18%
Revenue Next Year5.72%
Revenue Next 2Y5.73%
Revenue Next 3Y6.18%
Revenue Next 5Y5.95%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 40.50, which means the current valuation is very expensive for WMG.
WMG's Price/Earnings ratio is a bit cheaper when compared to the industry. WMG is cheaper than 73.75% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 25.98. WMG is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 20.85, the valuation of WMG can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WMG indicates a rather cheap valuation: WMG is cheaper than 83.75% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.79. WMG is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.5 | ||
| Fwd PE | 20.85 |
4.2 Price Multiples
67.50% of the companies in the same industry are more expensive than WMG, based on the Enterprise Value to EBITDA ratio.
66.25% of the companies in the same industry are more expensive than WMG, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.43 | ||
| EV/EBITDA | 14.3 |
4.3 Compensation for Growth
WMG's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
WMG has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as WMG's earnings are expected to grow with 39.10% in the coming years.
PEG (NY)0.43
PEG (5Y)N/A
EPS Next 2Y52.93%
EPS Next 3Y39.1%
5. Dividend
5.1 Amount
WMG has a Yearly Dividend Yield of 2.39%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 44.94, WMG pays a better dividend. On top of this WMG pays more dividend than 92.50% of the companies listed in the same industry.
WMG's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
5.2 History
The dividend of WMG has a limited annual growth rate of 1.77%.
WMG has been paying a dividend for over 5 years, so it has already some track record.
WMG has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)1.77%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
WMG pays out 106.98% of its income as dividend. This is not a sustainable payout ratio.
The dividend of WMG is growing, but earnings are growing more, so the dividend growth is sustainable.
DP106.98%
EPS Next 2Y52.93%
EPS Next 3Y39.1%
28.35
-0.63 (-2.17%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners103.68%
Inst Owner Change3.94%
Ins Owners1.3%
Ins Owner Change0.83%
Market Cap14.81B
Revenue(TTM)6.71B
Net Income(TTM)358.00M
Analysts80
Price Target38.3 (35.1%)
Short Float %4.18%
Short Ratio3.44
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.39% |
Yearly Dividend0.74
Dividend Growth(5Y)1.77%
DP106.98%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-74.17%
Min EPS beat(2)-110.91%
Max EPS beat(2)-37.42%
EPS beat(4)1
Avg EPS beat(4)-47.97%
Min EPS beat(4)-110.91%
Max EPS beat(4)31.13%
EPS beat(8)3
Avg EPS beat(8)-25.48%
EPS beat(12)5
Avg EPS beat(12)-19.63%
EPS beat(16)8
Avg EPS beat(16)-5.32%
Revenue beat(2)2
Avg Revenue beat(2)7.59%
Min Revenue beat(2)5.17%
Max Revenue beat(2)10.01%
Revenue beat(4)2
Avg Revenue beat(4)2.85%
Min Revenue beat(4)-3.26%
Max Revenue beat(4)10.01%
Revenue beat(8)4
Avg Revenue beat(8)1.82%
Revenue beat(12)6
Avg Revenue beat(12)1.59%
Revenue beat(16)10
Avg Revenue beat(16)2%
PT rev (1m)3.36%
PT rev (3m)3.63%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.96%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)-1.26%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)0.24%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.17%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 40.5 | ||
| Fwd PE | 20.85 | ||
| P/S | 2.21 | ||
| P/FCF | 43.43 | ||
| P/OCF | 21.94 | ||
| P/B | 22.89 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.3 |
EPS(TTM)0.7
EY2.47%
EPS(NY)1.36
Fwd EY4.8%
FCF(TTM)0.65
FCFY2.3%
OCF(TTM)1.29
OCFY4.56%
SpS12.84
BVpS1.24
TBVpS-8.22
PEG (NY)0.43
PEG (5Y)N/A
Graham Number4.42
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.64% | ||
| ROE | 55.33% | ||
| ROCE | 16.49% | ||
| ROIC | 12.78% | ||
| ROICexc | 14.12% | ||
| ROICexgc | 461.16% | ||
| OM | 13.84% | ||
| PM (TTM) | 5.34% | ||
| GM | 45.85% | ||
| FCFM | 5.08% |
ROA(3y)4.44%
ROA(5y)4.89%
ROE(3y)92.24%
ROE(5y)320.47%
ROIC(3y)13.09%
ROIC(5y)12.66%
ROICexc(3y)14.86%
ROICexc(5y)14.42%
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)16.89%
ROCE(5y)16.33%
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3Y-0.38%
ROICexc growth 5YN/A
OM growth 3Y4.68%
OM growth 5YN/A
PM growth 3Y-16.34%
PM growth 5YN/A
GM growth 3Y-1.49%
GM growth 5Y-0.8%
F-Score4
Asset Turnover0.68
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.75 | ||
| Debt/FCF | 12.8 | ||
| Debt/EBITDA | 3.35 | ||
| Cap/Depr | 88.83% | ||
| Cap/Sales | 4.98% | ||
| Interest Coverage | 5.56 | ||
| Cash Conversion | 51.76% | ||
| Profit Quality | 95.25% | ||
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.64 | ||
| Altman-Z | 1.6 |
F-Score4
WACC7.48%
ROIC/WACC1.71
Cap/Depr(3y)84.69%
Cap/Depr(5y)107.57%
Cap/Sales(3y)4.56%
Cap/Sales(5y)6%
Profit Quality(3y)101.59%
Profit Quality(5y)80.52%
High Growth Momentum
Growth
EPS 1Y (TTM)-37.5%
EPS 3Y-12.92%
EPS 5YN/A
EPS Q2Q%162.5%
EPS Next Y94.29%
EPS Next 2Y52.93%
EPS Next 3Y39.1%
EPS Next 5Y25.18%
Revenue 1Y (TTM)4.37%
Revenue growth 3Y4.25%
Revenue growth 5Y8.49%
Sales Q2Q%14.6%
Revenue Next Year5.72%
Revenue Next 2Y5.73%
Revenue Next 3Y6.18%
Revenue Next 5Y5.95%
EBIT growth 1Y-4.13%
EBIT growth 3Y9.13%
EBIT growth 5YN/A
EBIT Next Year83.17%
EBIT Next 3Y30.76%
EBIT Next 5Y19.73%
FCF growth 1Y-24.39%
FCF growth 3Y-6.41%
FCF growth 5Y0.18%
OCF growth 1Y-10.48%
OCF growth 3Y-3.11%
OCF growth 5Y7.83%
WARNER MUSIC GROUP CORP-CL A / WMG FAQ
What is the fundamental rating for WMG stock?
ChartMill assigns a fundamental rating of 4 / 10 to WMG.
Can you provide the valuation status for WARNER MUSIC GROUP CORP-CL A?
ChartMill assigns a valuation rating of 6 / 10 to WARNER MUSIC GROUP CORP-CL A (WMG). This can be considered as Fairly Valued.
How profitable is WARNER MUSIC GROUP CORP-CL A (WMG) stock?
WARNER MUSIC GROUP CORP-CL A (WMG) has a profitability rating of 7 / 10.
Can you provide the PE and PB ratios for WMG stock?
The Price/Earnings (PE) ratio for WARNER MUSIC GROUP CORP-CL A (WMG) is 40.5 and the Price/Book (PB) ratio is 22.89.
Can you provide the expected EPS growth for WMG stock?
The Earnings per Share (EPS) of WARNER MUSIC GROUP CORP-CL A (WMG) is expected to grow by 94.29% in the next year.