TME Tencent Music Entertainment Group
$8.65
▲ 0.0%Updated Oct 16, 2:25 PM ET
Report Card
TME at a glance — five pillars scored 0–100 from real filed financials.
How the 0–100 rating is calculatedOverall: Favorable · 65/100. A wider, greener shape means more pillars look healthy. Dividends scores 0 when a company pays none — that is a choice, not a flaw.
Price — Past Year
▼ Down 54.9% in the year to Jul 6, 2026
Key Metrics
Market Cap
$12.70B
P/E
9.74x
Forward P/E (est.)
10.46x
ROE
13.8%
Revenue Growth
15.4%
EPS Growth
-6.9%
Profit Margin
26.5%
FCF Yield
—
Debt / Equity
0.05x
ROIC
9.0%
Interest Coverage
92.66x
Current Ratio
2.09x
Dividend Yield
2.7%
Implied Growth (rev. DCF)
-1.8%
Rating Score
65/100
Business Overview
Tencent Music Entertainment Group (TME) is a large-cap NYSE-listed company in the Media industry, within the Communication Services sector, with a market value around $12.70B.
In its latest reported year it generated about $3.98B in revenue and $930.16M in net profit.
Our model rates TME Favorable (65/100) on growth, profitability, financial health, and valuation. The summary below is built from its filed financials and current ratios and refreshes automatically.
Economic Moat
Evidence of durable competitive advantage in the filed financials (9 years of history).
Profit margins and economic moats, explainedSome durable-advantage evidence, but not across the board — dig into which ingredient is weak and whether it's cyclical or structural.
36.2% average over the last 3 years
±4.1 pts around 34.0% across 9 years
grew in 6 of the last 8 year-over-year periods
positive in 9 of 9 years
9.0% latest fiscal year
A moat can't be proven by numbers alone — this scores the evidence a durable advantage leaves behind (pricing power, consistency, returns on capital), computed the same way for every stock. Pair it with the business overview before concluding anything.
Technical Analysis (Educational)
Technical analysis reads price and volume to judge momentum and timing. It complements the fundamentals above — it does not replace them. Here is what TME's chart says today, with each tool explained.
Trend — moving averages. A moving average is the average closing price over a window, which smooths out daily noise. TME trades near $8.65, below its 50-day average ($8.99) and 200-day average ($15.17). Price below both averages is a downtrend — momentum is against buyers for now.
Momentum — RSI. The Relative Strength Index runs 0–100 and measures how strong recent gains are versus losses. Above 70 is "overbought", below 30 "oversold". At 39 it is in neutral territory — neither stretched nor washed out.
MACD. MACD compares two moving averages to flag shifts in momentum. Its histogram is currently positive — short-term momentum is improving.
Volatility — ATR. Average True Range is the typical daily move. TME's is $0.28 (~3.2% of price), so swings of about that size each day are normal — handy for setting a stop that isn't too tight.
Support & resistance. In the month to Jul 6, 2026, TME found buyers near $7.94 (support) and sellers near $9.43 (resistance); its 52-week range then was $7.94–$26.70. A decisive break beyond either edge often marks the next move.
Volume. The latest session traded 0.3× the 20-day average — lighter than usual, so the move carries less conviction. Rising volume on up-days suggests real buying; on down-days, real selling.
Educational information to help you read a chart — not a recommendation or a forecast. The indicators were last computed on Jul 6, 2026; the price is current.
Revenue Growth
4Y CAGR
-0.7%
Revenue moved from $610.54M in 2016 to $3.98B in 2024, a 26.4% compound annual growth rate. The most recent year grew a strong 15.4% year over year. Consistent top-line growth is one sign of healthy demand.
Profitability
Gross Margin
42.3%
Operating Margin
30.7%
Net Margin
23.4%
ROE
13.8%
Tencent Music Entertainment Group keeps about 26.5% of each sales dollar as net profit, with a 42.3% gross margin and 30.7% operating margin. Return on equity is 13.8% and return on invested capital about 9.0%. Margins this wide usually signal pricing power or a cost advantage.
Debt Analysis
Total Debt
$789.04M
Net Debt
-$1.05B
Net cash position
Net Debt / EBITDA
-0.86x
Debt / Equity
0.05x
Leverage: debt-to-equity is 0.0x, and operating profit covers interest about 92.7x, with a current ratio of 2.1x. That is a conservative balance sheet — a cushion in downturns. It carries roughly $789.04M of total debt against $1.84B of cash.
Cash Flow Analysis
Operating CF
$1.44B
Free Cash Flow
$1.39B
FCF Margin
35.1%
In the latest year Tencent Music Entertainment Group produced about $1.44B of operating cash flow and $1.39B of free cash flow after capital spending. Cash flow is what ultimately pays shareholders, so it is worth tracking over time.
Valuation Analysis
P/E
9.74x
P/S
2.62x
P/B
2.12x
EV / EBITDA
8.58x
TME trades at 9.7x trailing earnings (about 10.5x on estimated forward earnings), 2.6x sales, and 2.1x book value. Reverse-engineering today's price implies the market expects roughly -1.8% long-term free-cash-flow growth. That is an undemanding multiple — potentially cheap if the business is stable.
DCF Fair Value (Educational)
A two-stage discounted cash flow on real SEC-filed free cash flow — the intrinsic-value anchor professional analysts triangulate from.
How this DCF estimate is calculatedDCF fair value / share
$14.28
Current price
$8.65
Starting FCF (latest 10-K)
$1.39B
Growth, years 1–5
15.4%
Fade to terminal, years 6–10
2.5%
Discount rate
9.0%
Cash flows grow at the stage-1 rate (trailing revenue growth, capped at 20%) for five years, fade to 2.5% by year 10, and continue at that rate forever (Gordon terminal value), all discounted at 9.0%. Small changes in assumptions move the result a lot — treat this as one reference point, not a target price. Educational only, not investment advice.
Metrics vs. Sector Range
Where TME sits versus the Communication Services companies we cover.
Bands show the middle half (25th–75th percentile) of the 44 Communication Services companies in our coverage that have fundamentals data — the peer-relative anchor professional comps analysis uses. Context only — not investment advice.
Sector Peer Comparison
How TME stacks up against its Communication Services peers — valuation, profitability, and growth versus the sector median.
Among the 44 rated Communication Services companies we cover, TME ranks #11 by our overall rating. It trades at a discount versus the sector on earnings (9.7x P/E vs. 17.4x median) with a lower return on equity (13.8% vs. 14.9%) and faster revenue growth (15.4% vs. 5.3%).
P/E vs sector
9.7x
median 17.4x
ROE vs sector
13.8%
median 14.9%
Growth vs sector
15.4%
median 5.3%
Sector rank
#11
of 44 rated
Valuation vs. quality map
The sweet spot is upper-left: more profitable (higher ROE) for a lower P/E. Dashed lines mark the sector median.
Peers are the closest Communication Services companies by sub-industry and size, preferring ones with full data. Sector medians and rank use the 44 rated companies among the 95 Communication Services stocks we cover. Educational, not a recommendation.
5-Year Projection Model
Project revenue → earnings → price. Edit the assumptions to build your own case.
What drives this projection, and its limits2030 scenario price range (Base Case)
$7.52 – $12.53
vs. $8.65 today · implied CAGR -3% – 8%
| Metric | 2026 | 2027 | 2028 | 2029 | 2030 |
|---|---|---|---|---|---|
| Revenue | $4.57B | $5.26B | $6.05B | $6.95B | $8.00B |
| Net income | $1.05B | $1.21B | $1.39B | $1.60B | $1.84B |
| EPS | $0.72 | $0.82 | $0.95 | $1.09 | $1.25 |
| Share price (low) | $4.30 | $4.94 | $5.69 | $6.54 | $7.52 |
| Share price (high) | $7.17 | $8.24 | $9.48 | $10.90 | $12.53 |
| CAGR (low–high) | -50% / -17% | -24% / -2% | -13% / 3% | -7% / 6% | -3% / 8% |
Educational scenario model, not a forecast or investment advice. It starts from the latest annual revenue in SEC filings. By default, growth is trailing revenue growth (held between 3% and 45% a year), the net margin is the latest one (held between 3% and 50%, so a loss-making company is modeled with a small profit), and the Base case P/E runs from 60% to 100% of today's. Carrying recent growth forward five years can miss badly in either direction. Outputs are only as good as the assumptions.
Bull Case
The case for TME:
- Revenue is growing 15.4% a year, a sign of real demand.
- High net margins (26.5%) point to pricing power or efficiency.
- A conservative balance sheet (debt/equity 0.0x) lowers risk.
- Pays a 2.7% dividend on top of any price gains.
- Our model's overall read is Favorable (65/100).
Bear Case
The case against TME:
- Like any single stock, it is exposed to competition, the economic cycle, and shifts in its end markets.
Key Risks
Market risk — sector rotation, the economic cycle, and broad sentiment move the stock regardless of fundamentals.
Investment Thesis
On balance, the fundamentals screen favourably: Tencent Music Entertainment Group is a large-cap communication services business still growing nicely, with solid profitability, and a sound balance sheet. It trades at 9.7x earnings, which our model scores Favorable (65/100). Weigh this against your own goals and time horizon — this is educational information, not a recommendation.
Analyst Ratings
What 32 Wall Street analysts covering TME recommend (September 2026). Consensus is a useful sanity check — not a substitute for your own homework.
Analysts have turned more cautious over the last three months (-15 pts of buy ratings).
Latest SEC Filings
TME's most recent filings, straight from SEC EDGAR. Annual and quarterly reports are the deep dives; 8-Ks flag material events the moment they happen. How to read a 10-K
In the Idea Lab
TME — frequently asked questions
Is TME a good stock to buy?
We don't give buy or sell advice. Our model rates Tencent Music Entertainment Group Favorable (65/100) based on its growth, profitability, financial health, and valuation — use that as a research starting point and make your own decision.
What is TME's rating on The Stocks School?
Tencent Music Entertainment Group currently scores 65/100 (Favorable) on our transparent model, which weighs real fundamentals: growth, margins, returns on capital, balance-sheet strength, and valuation.
How our ratings work →Where does TME's data come from?
Live price data plus real fundamentals and 5-year financials pulled directly from Tencent Music Entertainment Group's SEC filings — refreshed automatically, not hand-entered.
How is the 5-year projection for TME calculated?
It's a scenario model. It starts from the latest annual revenue and net margin in SEC filings, grows revenue at an assumed rate (trailing revenue growth by default), and applies a P/E range built around today's multiple to show the resulting share-price range. When a stock has no growth or P/E data, the starting values are placeholders. It's a tool for thinking, not a prediction.
Is this TME analysis financial advice?
No. Everything on this page is educational research, not financial advice or a recommendation to buy or sell TME. Always do your own research and consider a licensed professional.
Data notice. Fundamentals and financial statements are sourced from company filings (SEC EDGAR) and market-data providers; prices and market caps refresh on trading days and may be delayed. Ratings, projections, technical signals, and written summaries are model- or rule-generated for education and may simplify or lag the latest filings.
Not advice. Nothing on this page is investment advice or a recommendation to buy, hold, or sell any security. Do your own research and consult a licensed financial professional before investing.