Tencent Music Entertainment Group

NYSE:TME Stock Report

Market Cap: US$18.5b

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 ($11.72) is trading below our estimate of fair value ($22.3)

Significantly Below Fair Value: TME is trading below fair value by more than 20%.

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 Ratio22.6x
EarningsCN¥5.99b
Market CapCN¥135.34b

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 Average94.7x
WMG Warner Music Group
38x20.7%US$16.3b
EDR Endeavor Group Holdings
109.7x53.4%US$14.7b
FWON.K Formula One Group
84x18.0%US$23.1b
LYV Live Nation Entertainment
147x26.9%US$30.4b
TME Tencent Music Entertainment Group
22.6x15.2%US$18.5b

Price-To-Earnings vs Peers: TME is good value based on its Price-To-Earnings Ratio (22.6x) compared to the peer average (94.7x).

Price to Earnings Ratio vs Industry

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

7 CompaniesPrice / EarningsEstimated GrowthMarket Cap
DDI DoubleDown Interactive
4.5x0.3%US$507.92m
RDBX Redbox Entertainment
1.2x-121.8%US$76.65m
GMM Global Mofy AI
0.6xn/aUS$9.48m
MSGM Motorsport Games
0.8xn/aUS$3.92m
TME 22.6xIndustry Avg. 20.0xNo. of Companies7PE020406080100+
7 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: TME is expensive based on its Price-To-Earnings Ratio (22.6x) compared to the US Entertainment industry average (20x).

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 Ratio22.6x
Fair PE Ratio24.7x

Price-To-Earnings vs Fair Ratio: TME is good value based on its Price-To-Earnings Ratio (22.6x) compared to the estimated Fair Price-To-Earnings Ratio (24.7x).

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$11.72
US$14.48
+23.5%
9.0%US$17.02US$11.89n/a28
Dec ’25US$11.41
US$14.55
+27.5%
8.8%US$17.15US$11.98n/a29
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$7.33US$11.4125
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

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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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/29 04:04
End of Day Share Price 2024/12/27 00:00
Earnings2024/09/30
Annual Earnings2023/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

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.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

Tencent Music Entertainment Group is covered by 57 analysts. 29 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Ishan MajumdarBaptista Research
Jiong ShaoBarclays
Yanfang JiangBenchmark Company