WARNER MUSIC GROUP CORP-CL A (WMG) Stock Fundamental Analysis
NASDAQ:WMG - Nasdaq - US9345502036 - Common Stock - Currency: USD
Taking everything into account, WMG scores 4 out of 10 in our fundamental rating. WMG was compared to 74 industry peers in the Entertainment industry. While WMG belongs to the best of the industry regarding profitability, there are concerns on its financial health. WMG has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year WMG was profitable.
In the past year WMG had a positive cash flow from operations.
Of the past 5 years WMG 4 years were profitable.
WMG had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
WMG has a Return On Assets of 4.66%. This is amongst the best in the industry. WMG outperforms 81.08% of its industry peers.
The Return On Equity of WMG (78.66%) is better than 98.65% of its industry peers.
With an excellent Return On Invested Capital value of 11.44%, WMG belongs to the best of the industry, outperforming 89.19% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for WMG is significantly below the industry average of 23.18%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.66% | ||
| ROE | 78.66% | ||
| ROIC | 11.44% |
ROA(3y)5.53%
ROA(5y)2.67%
ROE(3y)192.94%
ROE(5y)N/A
ROIC(3y)12.68%
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 7.04%, WMG belongs to the top of the industry, outperforming 83.78% of the companies in the same industry.
WMG's Profit Margin has improved in the last couple of years.
WMG has a better Operating Margin (13.47%) than 82.43% of its industry peers.
WMG's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 46.81%, WMG is in line with its industry, outperforming 55.41% of the companies in the same industry.
In the last couple of years the Gross Margin of WMG has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.47% | ||
| PM (TTM) | 7.04% | ||
| GM | 46.81% |
OM growth 3Y9.45%
OM growth 5Y13.62%
PM growth 3Y5.66%
PM growth 5Y3.14%
GM growth 3Y-0.34%
GM growth 5Y0.62%
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.
Compared to 1 year ago, WMG has more shares outstanding
Compared to 5 years ago, WMG has more shares outstanding
WMG has a better debt/assets ratio than last year.
2.2 Solvency
Based on the Altman-Z score of 1.74, we must say that WMG is in the distress zone and has some risk of bankruptcy.
With a decent Altman-Z score value of 1.74, WMG is doing good in the industry, outperforming 62.16% of the companies in the same industry.
WMG has a debt to FCF ratio of 8.02. This is a slightly negative value and a sign of low solvency as WMG would need 8.02 years to pay back of all of its debts.
WMG has a better Debt to FCF ratio (8.02) than 66.22% of its industry peers.
WMG has a Debt/Equity ratio of 7.57. This is a high value indicating a heavy dependency on external financing.
WMG's Debt to Equity ratio of 7.57 is on the low side compared to the rest of the industry. WMG is outperformed by 75.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.57 | ||
| Debt/FCF | 8.02 | ||
| Altman-Z | 1.74 |
ROIC/WACC1.44
WACC7.93%
2.3 Liquidity
A Current Ratio of 0.66 indicates that WMG may have some problems paying its short term obligations.
WMG has a worse Current ratio (0.66) than 67.57% of its industry peers.
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 64.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.64 |
3. Growth
3.1 Past
The earnings per share for WMG have decreased strongly by -58.70% in the last year.
WMG shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 10.64% yearly.
WMG shows a small growth in Revenue. In the last year, the Revenue has grown by 6.44%.
WMG shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.51% yearly.
EPS 1Y (TTM)-58.7%
EPS 3Y24.53%
EPS 5Y10.64%
EPS Q2Q%-109.37%
Revenue 1Y (TTM)6.44%
Revenue growth 3Y6.63%
Revenue growth 5Y7.51%
Sales Q2Q%8.69%
3.2 Future
Based on estimates for the next years, WMG will show a quite strong growth in Earnings Per Share. The EPS will grow by 11.84% on average per year.
WMG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.68% yearly.
EPS Next Y1.19%
EPS Next 2Y10.08%
EPS Next 3Y11.57%
EPS Next 5Y11.84%
Revenue Next Year0.17%
Revenue Next 2Y2.92%
Revenue Next 3Y3.81%
Revenue Next 5Y4.68%
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 stable.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 57.00, the valuation of WMG can be described as expensive.
WMG's Price/Earnings ratio is a bit cheaper when compared to the industry. WMG is cheaper than 71.62% of the companies in the same industry.
WMG's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 26.85.
The Price/Forward Earnings ratio is 23.94, which indicates a rather expensive current valuation of WMG.
Compared to the rest of the industry, the Price/Forward Earnings ratio of WMG indicates a somewhat cheap valuation: WMG is cheaper than 74.32% of the companies listed in the same industry.
WMG's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 34.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57 | ||
| Fwd PE | 23.94 |
4.2 Price Multiples
70.27% of the companies in the same industry are more expensive than WMG, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, WMG is valued a bit cheaper than 74.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.66 | ||
| EV/EBITDA | 17.25 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of WMG may justify a higher PE ratio.
PEG (NY)47.74
PEG (5Y)5.36
EPS Next 2Y10.08%
EPS Next 3Y11.57%
5. Dividend
5.1 Amount
WMG has a Yearly Dividend Yield of 2.46%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 6.74, WMG pays a better dividend. On top of this WMG pays more dividend than 93.24% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, WMG has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
5.2 History
The dividend of WMG is nicely growing with an annual growth rate of 30.53%!
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)30.53%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
WMG pays out 83.41% of its income as dividend. This is not a sustainable payout ratio.
The dividend of WMG is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP83.41%
EPS Next 2Y10.08%
EPS Next 3Y11.57%
NASDAQ:WMG (8/20/2025, 10:13:04 AM)
32.49
+0.05 (+0.15%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners106.33%
Inst Owner Change-4.63%
Ins Owners1.3%
Ins Owner Change1.98%
Market Cap16.94B
Analysts78.33
Price Target34.47 (6.09%)
Short Float %4.05%
Short Ratio2.94
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
Yearly Dividend0.7
Dividend Growth(5Y)30.53%
DP83.41%
Div Incr Years4
Div Non Decr Years4
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-21.77%
Min EPS beat(2)-74.67%
Max EPS beat(2)31.13%
EPS beat(4)2
Avg EPS beat(4)-24.21%
Min EPS beat(4)-74.67%
Max EPS beat(4)31.13%
EPS beat(8)5
Avg EPS beat(8)-0.98%
EPS beat(12)7
Avg EPS beat(12)4.3%
EPS beat(16)8
Avg EPS beat(16)-1.53%
Revenue beat(2)0
Avg Revenue beat(2)-1.9%
Min Revenue beat(2)-3.26%
Max Revenue beat(2)-0.54%
Revenue beat(4)1
Avg Revenue beat(4)-1%
Min Revenue beat(4)-3.26%
Max Revenue beat(4)1.43%
Revenue beat(8)3
Avg Revenue beat(8)0.55%
Revenue beat(12)6
Avg Revenue beat(12)0.79%
Revenue beat(16)10
Avg Revenue beat(16)1.77%
PT rev (1m)2.55%
PT rev (3m)-3.17%
EPS NQ rev (1m)-0.28%
EPS NQ rev (3m)-2.99%
EPS NY rev (1m)0%
EPS NY rev (3m)-9.1%
Revenue NQ rev (1m)0.12%
Revenue NQ rev (3m)-0.68%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)-0.52%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 57 | ||
| Fwd PE | 23.94 | ||
| P/S | 2.67 | ||
| P/FCF | 31.66 | ||
| P/OCF | 18.97 | ||
| P/B | 29.87 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.25 |
EPS(TTM)0.57
EY1.75%
EPS(NY)1.36
Fwd EY4.18%
FCF(TTM)1.03
FCFY3.16%
OCF(TTM)1.71
OCFY5.27%
SpS12.15
BVpS1.09
TBVpS-8.4
PEG (NY)47.74
PEG (5Y)5.36
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.66% | ||
| ROE | 78.66% | ||
| ROCE | 15.09% | ||
| ROIC | 11.44% | ||
| ROICexc | 12.89% | ||
| ROICexgc | 937.18% | ||
| OM | 13.47% | ||
| PM (TTM) | 7.04% | ||
| GM | 46.81% | ||
| FCFM | 8.45% |
ROA(3y)5.53%
ROA(5y)2.67%
ROE(3y)192.94%
ROE(5y)N/A
ROIC(3y)12.68%
ROIC(5y)N/A
ROICexc(3y)14.58%
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)16.73%
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3Y7.45%
ROICexc growth 5Y8.97%
OM growth 3Y9.45%
OM growth 5Y13.62%
PM growth 3Y5.66%
PM growth 5Y3.14%
GM growth 3Y-0.34%
GM growth 5Y0.62%
F-Score4
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.57 | ||
| Debt/FCF | 8.02 | ||
| Debt/EBITDA | 3.6 | ||
| Cap/Depr | 105.61% | ||
| Cap/Sales | 5.65% | ||
| Interest Coverage | 5.2 | ||
| Cash Conversion | 74.92% | ||
| Profit Quality | 119.96% | ||
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.64 | ||
| Altman-Z | 1.74 |
F-Score4
WACC7.93%
ROIC/WACC1.44
Cap/Depr(3y)87.14%
Cap/Depr(5y)99.38%
Cap/Sales(3y)4.74%
Cap/Sales(5y)5.57%
Profit Quality(3y)95.6%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-58.7%
EPS 3Y24.53%
EPS 5Y10.64%
EPS Q2Q%-109.37%
EPS Next Y1.19%
EPS Next 2Y10.08%
EPS Next 3Y11.57%
EPS Next 5Y11.84%
Revenue 1Y (TTM)6.44%
Revenue growth 3Y6.63%
Revenue growth 5Y7.51%
Sales Q2Q%8.69%
Revenue Next Year0.17%
Revenue Next 2Y2.92%
Revenue Next 3Y3.81%
Revenue Next 5Y4.68%
EBIT growth 1Y-8.96%
EBIT growth 3Y16.7%
EBIT growth 5Y22.15%
EBIT Next Year36.05%
EBIT Next 3Y18.71%
EBIT Next 5Y14.15%
FCF growth 1Y-7.6%
FCF growth 3Y91.72%
FCF growth 5Y12.08%
OCF growth 1Y15.67%
OCF growth 3Y5.73%
OCF growth 5Y13.52%