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Tuesday, October 3, 2023

When Will Tencent Music Entertainment Group (TME) Slow Down

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Tencent Music Entertainment Group (TME) shares are trading at higher $16.74.

To add more color to this target, the company’s high over the last year is $17.97 and the low is $9.22. Over the last 52 weeks, TME is up 35.99% while the S&P 500 is up 17.73%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, TME reported a profit of $362.0 million. Tencent Music Entertainment Group also saw revenues increase to $1.12 billion. In addition, TME has free cash flow of $445.0 million as of 09-2020. The company’s EBITDA came in at $151.0 million which compares well with its peers.

TME booked profit margins of 14.20%, its Return on Equity (ROE) is 8.60%, and its Return on Assets is 7.00%. All told, it is clear that, TME needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. TME has a short ratio of 8.48 and outstanding shares of 1.66B.

Company Outlook

TME has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 11.98 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 0.36. Tencent Music Entertainment Group TME also noted assets of $9.44 billion at the end of the last quarter. Investors should also keep an eye on sector updates as TME has historically followed its peers on positive news.

All told, Tencent Music Entertainment Group TME has strung together solid data and demonstrated underlying fundamentals. At its current valuation, TME represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Tencent Music Entertainment Group TME is now commanding a market cap of 27.61B and a float of 605.81M. TME is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of TME stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in TME, either long or short, and we have not been compensated for this article.

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