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WMG

Warner Music Group NasdaqGS:WMG Stock Report

Last Price

US$27.96

Market Cap

US$14.4b

7D

-4.0%

1Y

-22.0%

Updated

25 May, 2022

Data

Company Financials +
WMG fundamental analysis
Snowflake Score
Valuation1/6
Future Growth4/6
Past Performance2/6
Financial Health1/6
Dividends2/6

WMG Stock Overview

Warner Music Group Corp. operates as a music entertainment company in the United States, the United Kingdom, Germany, and internationally.

Warner Music Group Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Warner Music Group
Historical stock prices
Current Share PriceUS$27.96
52 Week HighUS$50.23
52 Week LowUS$24.39
Beta0
1 Month Change-10.39%
3 Month Change-23.38%
1 Year Change-21.99%
3 Year Changen/a
5 Year Changen/a
Change since IPO-7.17%

Recent News & Updates

May 22

Warner Music Group: Slow But Steady, Don't Forget About This Music Leader

Shares of Warner Music Group have fallen in sympathy with the markets this year, down ~30% YTD. Fundamental performance, however, remains solid. The company is experiencing growth in streaming revenue while the return of concerts and festivals is boosting music sales. Profitability continues to grow as well, fueling Warner Music Group's recently raised dividend. Its 2% yield offers investors a decent reward for remaining patient.

May 18
Warner Music Group's (NASDAQ:WMG) Returns On Capital Are Heading Higher

Warner Music Group's (NASDAQ:WMG) Returns On Capital Are Heading Higher

What are the early trends we should look for to identify a stock that could multiply in value over the long term...

Shareholder Returns

WMGUS EntertainmentUS Market
7D-4.0%0.8%1.0%
1Y-22.0%-48.7%-15.1%

Return vs Industry: WMG exceeded the US Entertainment industry which returned -49.8% over the past year.

Return vs Market: WMG underperformed the US Market which returned -13.2% over the past year.

Price Volatility

Is WMG's price volatile compared to industry and market?
WMG volatility
WMG Average Weekly Movement8.0%
Entertainment Industry Average Movement12.4%
Market Average Movement7.8%
10% most volatile stocks in US Market16.8%
10% least volatile stocks in US Market2.9%

Stable Share Price: WMG is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: WMG's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19295,900Steve Cooperhttps://www.wmg.com

Warner Music Group Corp. operates as a music entertainment company in the United States, the United Kingdom, Germany, and internationally. The company operates through Recorded Music and Music Publishing segments. The Recorded Music segment is involved in the discovery and development of recording artists, as well as related marketing, promotion, distribution, sale, and licensing of music created by such recording artists; markets its music catalog through compilations and reissuances of previously released music and video titles, as well as previously unreleased materials; and conducts its operation primarily through a collection of record labels, such as Warner Records and Atlantic Records, as well as Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Fueled by Ramen, Nonesuch, Parlophone, Reprise, Roadrunner, Sire, Spinnin’ Records, Warner Classics, and Warner Music Nashville.

Warner Music Group Fundamentals Summary

How do Warner Music Group's earnings and revenue compare to its market cap?
WMG fundamental statistics
Market CapUS$14.40b
Earnings (TTM)US$363.00m
Revenue (TTM)US$5.71b

39.7x

P/E Ratio

2.5x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
WMG income statement (TTM)
RevenueUS$5.71b
Cost of RevenueUS$2.95b
Gross ProfitUS$2.76b
Other ExpensesUS$2.39b
EarningsUS$363.00m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.71
Gross Margin48.32%
Net Profit Margin6.36%
Debt/Equity Ratio2,214.5%

How did WMG perform over the long term?

See historical performance and comparison

Dividends

2.1%

Current Dividend Yield

81%

Payout Ratio

Valuation

Is Warner Music Group undervalued compared to its fair value and its price relative to the market?

Valuation Score

1/6

Valuation Score 1/6

  • Below Fair Value

  • Significantly Below Fair Value

  • PE vs Industry

  • PE vs Market

  • PEG Ratio

  • PB vs Industry


16.2%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: WMG ($27.96) is trading below our estimate of fair value ($33.35)

Significantly Below Fair Value: WMG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: WMG is poor value based on its Price-To-Earnings Ratio (39.7x) compared to the US Entertainment industry average (23.8x).

PE vs Market: WMG is poor value based on its Price-To-Earnings Ratio (39.7x) compared to the US market (14.9x).


Price to Earnings Growth Ratio

PEG Ratio: WMG is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: WMG is overvalued based on its Price-To-Book Ratio (93.5x) compared to the US Entertainment industry average (1.9x).


Future Growth

How is Warner Music Group forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


18.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: WMG's forecast earnings growth (18.6% per year) is above the savings rate (1.9%).

Earnings vs Market: WMG's earnings (18.6% per year) are forecast to grow faster than the US market (12.1% per year).

High Growth Earnings: WMG's earnings are forecast to grow, but not significantly.

Revenue vs Market: WMG's revenue (9.8% per year) is forecast to grow faster than the US market (7.7% per year).

High Growth Revenue: WMG's revenue (9.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: WMG's Return on Equity is forecast to be very high in 3 years time (92.2%).


Past Performance

How has Warner Music Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-9.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: WMG has high quality earnings.

Growing Profit Margin: WMG became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: WMG's earnings have declined by 9% per year over the past 5 years.

Accelerating Growth: WMG has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: WMG has become profitable in the last year, making it difficult to compare its past year earnings growth to the Entertainment industry (7.1%).


Return on Equity

High ROE: Whilst WMG's Return on Equity (214.45%) is outstanding, this metric is skewed due to their high level of debt.


Financial Health

How is Warner Music Group's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: WMG's short term assets ($1.9B) do not cover its short term liabilities ($3.1B).

Long Term Liabilities: WMG's short term assets ($1.9B) do not cover its long term liabilities ($4.5B).


Debt to Equity History and Analysis

Debt Level: WMG's net debt to equity ratio (1991.9%) is considered high.

Reducing Debt: WMG's debt to equity ratio has increased from 1468% to 2214.5% over the past 5 years.

Debt Coverage: WMG's debt is not well covered by operating cash flow (12.8%).

Interest Coverage: WMG's interest payments on its debt are well covered by EBIT (5.5x coverage).


Balance Sheet


Dividend

What is Warner Music Group current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


2.15%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: WMG's dividend (2.15%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: WMG's dividend (2.15%) is low compared to the top 25% of dividend payers in the US market (4.06%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, WMG has been paying a dividend for less than 10 years.

Growing Dividend: WMG's dividend payments have increased, but the company has only paid a dividend for 2 years.


Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (80.8%), WMG's payments are covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (594.1%), WMG's dividend payments are not well covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

7.3yrs

Average management tenure


CEO

Steve Cooper (75 yo)

10.75yrs

Tenure

US$10,744,727

Compensation

Mr. Stephen Forbes Cooper, also known as Steve, is the Trustee of The Paley Center for Media. Mr. Cooper has been the Chief Executive Officer of Warner Music Group Corp. since August 18, 2011 and has been...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD10.74M) is about average for companies of similar size in the US market ($USD13.26M).

Compensation vs Earnings: Steve's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: WMG's management team is seasoned and experienced (7.3 years average tenure).


Board Members

Experienced Board: WMG's board of directors are considered experienced (9.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: WMG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Warner Music Group Corp.'s employee growth, exchange listings and data sources


Key Information

  • Name: Warner Music Group Corp.
  • Ticker: WMG
  • Exchange: NasdaqGS
  • Founded: 1929
  • Industry: Movies and Entertainment
  • Sector: Media
  • Implied Market Cap: US$14.395b
  • Shares outstanding: 514.85m
  • Website: https://www.wmg.com

Number of Employees


Location

  • Warner Music Group Corp.
  • 1633 Broadway
  • New York
  • New York
  • 10019
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/05/25 00:00
End of Day Share Price2022/05/25 00:00
Earnings2022/03/31
Annual Earnings2021/09/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.