29.98 USD
-0.76 (-2.47%)
29.98 USD
0 (0%)
We assign a fundamental rating of 4 out of 10 to WMG. WMG was compared to 80 industry peers in the Entertainment industry. WMG scores excellent on profitability, 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.
In the past 5 years WMG always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 3.64%, WMG is doing good in the industry, outperforming 78.75% of the companies in the same industry.
WMG's Return On Equity of 55.33% is amongst the best of the industry. WMG outperforms 97.50% of its industry peers.
WMG has a better Return On Invested Capital (12.78%) than 91.25% of its industry peers.
WMG had an Average Return On Invested Capital over the past 3 years of 13.09%. This is above the industry average of 8.70%.
| 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's Profit Margin of 5.34% is fine compared to the rest of the industry. WMG outperforms 73.75% of its industry peers.
In the last couple of years the Profit Margin of WMG has declined.
WMG has a Operating Margin of 13.84%. This is amongst the best in the industry. WMG outperforms 81.25% of its industry peers.
WMG's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 45.85%, WMG perfoms like the industry average, outperforming 53.75% 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.
Compared to 1 year ago, WMG has more shares outstanding
WMG has more shares outstanding than it did 5 years ago.
WMG has a worse debt/assets ratio than last year.
2.2 Solvency
WMG has an Altman-Z score of 1.68. This is a bad value and indicates that WMG is not financially healthy and even has some risk of bankruptcy.
WMG has a Altman-Z score of 1.68. This is comparable to the rest of the industry: WMG outperforms 57.50% of its industry peers.
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 has a Debt to FCF ratio of 12.80. This is in the better half of the industry: WMG outperforms 61.25% of its industry peers.
A Debt/Equity ratio of 6.75 is on the high side and indicates that WMG has dependencies on debt financing.
WMG has a worse Debt to Equity ratio (6.75) than 78.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 6.75 | ||
| Debt/FCF | 12.8 | ||
| Altman-Z | 1.68 |
ROIC/WACC1.28
WACC10%
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 71.25% 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's Quick ratio of 0.64 is on the low side compared to the rest of the industry. WMG is outperformed by 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%.
WMG shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -12.92% yearly.
Looking at the last year, WMG shows a small growth in Revenue. The Revenue has grown by 4.37% in the last year.
WMG shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 8.49% yearly.
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
WMG is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 25.18% yearly.
WMG is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.95% yearly.
EPS Next Y100.37%
EPS Next 2Y56.74%
EPS Next 3Y39.53%
EPS Next 5Y25.18%
Revenue Next Year7.28%
Revenue Next 2Y6.57%
Revenue Next 3Y6.09%
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.
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 42.83, the valuation of WMG can be described as expensive.
Based on the Price/Earnings ratio, WMG is valued a bit cheaper than 75.00% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.87, WMG is valued quite expensively.
A Price/Forward Earnings ratio of 21.37 indicates a rather expensive valuation of WMG.
WMG's Price/Forward Earnings ratio is rather cheap when compared to the industry. WMG is cheaper than 81.25% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.46, WMG is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.83 | ||
| Fwd PE | 21.37 |
4.2 Price Multiples
WMG's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. WMG is cheaper than 67.50% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of WMG indicates a somewhat cheap valuation: WMG is cheaper than 66.25% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 45.93 | ||
| EV/EBITDA | 15.25 |
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.
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 39.53% in the coming years.
PEG (NY)0.43
PEG (5Y)N/A
EPS Next 2Y56.74%
EPS Next 3Y39.53%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.48%, WMG has a reasonable but not impressive dividend return.
WMG's Dividend Yield is rather good when compared to the industry average which is at 8.64. WMG pays more dividend than 92.50% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.94, WMG pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.48% |
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
106.98% of the earnings are spent on dividend by WMG. This is not a sustainable payout ratio.
WMG's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP106.98%
EPS Next 2Y56.74%
EPS Next 3Y39.53%
29.98
-0.76 (-2.47%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners109.12%
Inst Owner Change0%
Ins Owners1.42%
Ins Owner Change0.82%
Market Cap15.66B
Revenue(TTM)6.71B
Net Income(TTM)358.00M
Analysts80.83
Price Target38.39 (28.05%)
Short Float %4.81%
Short Ratio3.08
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.48% |
Yearly Dividend0.74
Dividend Growth(5Y)1.77%
DP106.98%
Div Incr Years4
Div Non Decr Years4
Ex-DateN/A
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)0.23%
PT rev (3m)3.61%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-2.11%
EPS NY rev (1m)-0.09%
EPS NY rev (3m)0.62%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.42%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.58%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 42.83 | ||
| Fwd PE | 21.37 | ||
| P/S | 2.34 | ||
| P/FCF | 45.93 | ||
| P/OCF | 23.2 | ||
| P/B | 24.21 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.25 |
EPS(TTM)0.7
EY2.33%
EPS(NY)1.4
Fwd EY4.68%
FCF(TTM)0.65
FCFY2.18%
OCF(TTM)1.29
OCFY4.31%
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 | 1.68 |
F-Score4
WACC10%
ROIC/WACC1.28
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 Y100.37%
EPS Next 2Y56.74%
EPS Next 3Y39.53%
EPS Next 5Y25.18%
Revenue 1Y (TTM)4.37%
Revenue growth 3Y4.25%
Revenue growth 5Y8.49%
Sales Q2Q%14.6%
Revenue Next Year7.28%
Revenue Next 2Y6.57%
Revenue Next 3Y6.09%
Revenue Next 5Y5.95%
EBIT growth 1Y-4.13%
EBIT growth 3Y9.13%
EBIT growth 5YN/A
EBIT Next Year91.5%
EBIT Next 3Y32.51%
EBIT Next 5Y20.4%
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.
What is the valuation status of WARNER MUSIC GROUP CORP-CL A (WMG) stock?
ChartMill assigns a valuation rating of 6 / 10 to WARNER MUSIC GROUP CORP-CL A (WMG). This can be considered as Fairly Valued.
What is the profitability of WMG stock?
WARNER MUSIC GROUP CORP-CL A (WMG) has a profitability rating of 7 / 10.
What is the earnings growth outlook for WARNER MUSIC GROUP CORP-CL A?
The Earnings per Share (EPS) of WARNER MUSIC GROUP CORP-CL A (WMG) is expected to grow by 100.37% in the next year.
How sustainable is the dividend of WARNER MUSIC GROUP CORP-CL A (WMG) stock?
The dividend rating of WARNER MUSIC GROUP CORP-CL A (WMG) is 5 / 10 and the dividend payout ratio is 106.98%.