Tencent Music Entertainment Group

NYSE:TME Stock Report

Market Cap: US$18.2b

Tencent Music Entertainment Group Valuation

Is TME undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of TME when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TME ($11.53) is trading below our estimate of fair value ($14.26)

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

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TME?

Key metric: As TME is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for TME. This is calculated by dividing TME's market cap by their current earnings.
What is TME's PE Ratio?
PE Ratio22.1x
EarningsCN¥5.99b
Market CapCN¥132.18b

Price to Earnings Ratio vs Peers

How does TME's PE Ratio compare to its peers?

The above table shows the PE ratio for TME vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average93.5x
WMG Warner Music Group
37.9x24.0%US$16.5b
EDR Endeavor Group Holdings
104.2x45.2%US$13.9b
FWON.K Formula One Group
75.3x20.0%US$20.7b
LYV Live Nation Entertainment
156.4x31.4%US$32.4b
TME Tencent Music Entertainment Group
22.1x15.3%US$18.2b

Price-To-Earnings vs Peers: TME is good value based on its Price-To-Earnings Ratio (22.1x) compared to the peer average (93.5x).

Price to Earnings Ratio vs Industry

How does TME's PE Ratio compare vs other companies in the US Entertainment Industry?

6 CompaniesPrice / EarningsEstimated GrowthMarket Cap
IH iHuman
4.4xn/aUS$79.60m
RDBX Redbox Entertainment
1.2x-121.8%US$76.65m
GMM Global Mofy AI
0.6xn/aUS$9.57m
MSGM Motorsport Games
0.7xn/aUS$3.53m
TME 22.1xIndustry Avg. 22.8xNo. of Companies6PE020406080100+
6 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: TME is good value based on its Price-To-Earnings Ratio (22.1x) compared to the US Entertainment industry average (22.8x).

Price to Earnings Ratio vs Fair Ratio

What is TME's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TME PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio22.1x
Fair PE Ratio24.6x

Price-To-Earnings vs Fair Ratio: TME is good value based on its Price-To-Earnings Ratio (22.1x) compared to the estimated Fair Price-To-Earnings Ratio (24.6x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst TME forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUS$11.53
US$14.59
+26.5%
8.9%US$17.16US$11.99n/a28
Nov ’25US$11.12
US$14.60
+31.3%
13.0%US$17.23US$7.61n/a27
Oct ’25US$12.75
US$14.70
+15.3%
14.4%US$17.52US$7.71n/a27
Sep ’25US$10.44
US$14.70
+40.8%
13.0%US$17.19US$7.56n/a27
Aug ’25US$13.29
US$16.32
+22.8%
13.7%US$18.99US$8.88n/a29
Jul ’25US$14.34
US$16.32
+13.8%
13.7%US$18.91US$8.89n/a29
Jun ’25US$14.45
US$16.30
+12.8%
13.8%US$18.97US$8.92n/a29
May ’25US$12.39
US$12.92
+4.3%
12.3%US$17.75US$8.92n/a30
Apr ’25US$11.12
US$12.39
+11.4%
16.1%US$17.80US$6.13n/a30
Mar ’25US$10.39
US$10.07
-3.0%
12.2%US$12.99US$7.95n/a29
Feb ’25US$9.26
US$9.86
+6.4%
10.4%US$12.62US$7.97n/a26
Jan ’25US$9.01
US$9.25
+2.7%
12.2%US$12.69US$7.24n/a25
Dec ’24US$8.43
US$9.22
+9.4%
12.1%US$12.72US$7.33n/a25
Nov ’24US$7.21
US$8.60
+19.2%
15.2%US$12.47US$6.59US$11.1225
Oct ’24US$6.38
US$8.52
+33.6%
15.2%US$12.50US$6.60US$12.7524
Sep ’24US$7.02
US$8.54
+21.7%
14.6%US$11.68US$6.63US$10.4425
Aug ’24US$6.69
US$9.41
+40.6%
14.1%US$11.86US$6.93US$13.2925
Jul ’24US$7.38
US$9.90
+34.2%
12.1%US$11.75US$7.42US$14.3425
Jun ’24US$7.33
US$10.08
+37.5%
12.2%US$11.98US$7.36US$14.4525
May ’24US$7.22
US$9.53
+32.0%
16.6%US$12.25US$5.07US$12.3925
Apr ’24US$8.28
US$9.42
+13.8%
18.4%US$12.35US$5.11US$11.1225
Mar ’24US$8.01
US$9.07
+13.2%
20.9%US$12.21US$4.59US$10.3925
Feb ’24US$8.87
US$8.97
+1.2%
22.7%US$12.58US$4.73US$9.2625
Jan ’24US$8.28
US$7.16
-13.5%
22.0%US$10.30US$4.58US$9.0123
Dec ’23US$6.94
US$6.71
-3.4%
19.5%US$9.05US$4.53US$8.4322
Nov ’23US$3.76
US$5.66
+50.6%
22.0%US$7.91US$3.37US$7.2121

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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