TME$19.01
$19.3
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AI TME Summary
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Powered by LiveAIOverall Analysis
BuyTencent Music Entertainment (TME) exhibits strong fundamentals with robust profitability and cash flow, but faces some valuation concerns. Thematic tailwinds in digital entertainment are positive, while technical indicators suggest a mixed short-term outlook. Recommended for investors seeking exposure to the growing Chinese digital entertainment market with a moderate risk tolerance.
Thematic
TME is well-positioned within the booming Chinese digital music and entertainment sector. Growth in long-form audio, live streaming, and music-related merchandise provides multiple avenues for expansion. However, regulatory shifts and competition within China are key watchpoints.
Fundamental
TME demonstrates strong revenue and profit growth, coupled with healthy profit margins and a solid balance sheet. The company consistently generates substantial free cash flow, supporting its operations and potential shareholder returns. Valuation metrics are somewhat mixed, with a P/E that suggests growth expectations are being priced in.
Technical
The stock has shown significant positive performance over the past year, but recent short-term indicators suggest a potential for consolidation or a slight pullback. Moving averages are mostly bearish on shorter timeframes, while longer-term indicators remain more supportive.
| Factor | Score |
|---|---|
| Digital Music Growth | 85 |
| Social Entertainment & Live Streaming | 80 |
| Long-Form Audio and Video | 70 |
| Regulatory Environment (China) | 50 |
| Competitive Landscape | 70 |
| Factor | Score |
|---|---|
| Valuation | 70 |
| Profitability | 95 |
| Growth | 60 |
| Balance Sheet Health | 95 |
| Cash Flow Generation | 90 |
| Dividend Yield | 30 |
| Factor | Score |
|---|---|
| Trend Analysis | 50 |
| Momentum | 65 |
| Volume Confirmation | 70 |
| Support & Resistance | 60 |
| Short-Term Oscillators | 55 |
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Powered by LiveAIBullish Points (6)
Strong EPS Beat and Positive Revenue Trends
TME's Q1 2025 EPS estimate was $1.29, and the reported EPS was $1.47, a beat of 13.66%. The trailing twelve months (TTM) P/E ratio is 24.98, which, while not low, needs to be considered against its recent revenue and net income growth.
Undervalued Based on TTM P/E and P/S
The TTM Price-to-Earnings (P/E) ratio is 4.2, and the Price-to-Sales (P/S) ratio is 1.5, indicating a potentially attractive valuation relative to its earnings and revenue over the last twelve months.
Bearish Points (7)
High P/E Ratio Based on Forward Estimates
While the TTM P/E is low, the quarterly P/E ratios for 2024 and 2025 show a significant increase, with Q1 2025 at 2.4 and Q1 2024 at 10.6, suggesting that future earnings growth expectations are high and may lead to a higher valuation if not met.
Slowing Revenue Growth in Recent Quarters
While annual revenue for 2024 was strong at $28.401 billion, the quarterly revenue figures for 2024 show a downward trend from $7.16 billion in Q2 to $7.458 billion in Q4, with a notably higher Q1 2025 ($7.356 billion) compared to Q4 2024 ($7.458 billion).
Calendar
April 2025
3
Ex-Dividend Date
April 2025
24
Next Dividend Date
August 2025
12
Next Earnings Date
H: $1.55
A: $1.46
L: $1.42
H: 8.01B
A: 7.97B
L: 7.92B
Profile
Tencent Music Entertainment Group operates online music entertainment platforms that provides music streaming, online karaoke, and live streaming services in the People's Republic of China. It offers QQ Music, Kugou Music, and Kuwo Music that enable users to discover, enjoy, and share music in personalized ways; long-form audio content, including audiobooks, podcasts and talk shows, as well as music-oriented video content comprising music videos, live performances, and short videos; and WeSing, which enables users to sing along from its library of karaoke songs and share their performances in audio or video formats with friends. The company also delivers music-centric live streaming services primarily through the Live Streaming tab on QQ Music, Kugou Music, Kuwo Music, WeSing, Kugou Live, and Kuwo Live that provides an interactive online stage for performers and users to showcase their talent and engage with audience base; and Lazy Audio, an audio platform. In addition, it sells artist-related merchandise, such as branded apparel, posters and art prints, and accessories; other music services, such as content licensing, sales of digital albums, sales of customized artist-related merchandises, live performances and concerts, and artist management services; and music subscriptions, as well as offers advertising services across its social entertainment platforms. The company is headquartered in Shenzhen, China. Tencent Music Entertainment Group is a subsidiary of Tencent Holdings Limited.
Seasonals
Price Target
19.08 USD
The 39 analysts offering 1 year price forecasts for TME have a max estimate of 26.25 and a min estimate of 14.58.
Debt Level and Coverage
Financial Position Analysis
Ownership
Capital Structure
Valuation - Summary
Valuation - Ratios
Revenue to Profit Conversion
Balance Sheet
Income Statement
Cash Flow
Related Companies
Powered by LiveAIWeight: 100
Parent company of TME, providing strategic direction, capital, and significant ecosystem integration, including social platforms (WeChat, QQ) that drive TME's user base and engagement.
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