Tencent Music (NYSE:TME) (HK:1698)shares are up by nearly 2% in the early session today after the online music entertainment platform posted better-than-anticipated numbers for the fourth quarter. TME is a subsidiary of Chinese tech giant Tencent Holdings (OTC:TCEHY) (HK:0700).
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In Q4, TME’s topline dropped by 7.2% year-over-year to $971 million. Still, the figure landed ahead of estimates by $38.6 million. Earnings Per American Depository Share (EPADS) of $0.14 exceeded expectations by a narrow margin of $0.01. The company had posted an EPS of $0.10 in the comparable year-ago period.
The decline in TME’s top line was primarily due to lower revenue from social entertainment services. This impact was partially offset by gains in online music services. Its revenue from music subscriptions soared by 45.3% year-over-year to $481 million during the quarter. Additionally, its number of paying users ballooned by 20.6% to 106.7 million during this period.
Next, the company is banking on partnerships with record labels, strengthening content across different genres, and collaborative content creation to drive growth over the coming periods.
What Is the Price Target for TME Stock?
Tencent Music’s share price has rallied by nearly 67% over the past six months. Overall, the Street has a Strong Buy consensus rating on the stock alongside an average NME price target of $10.89. However, analysts’ views on Tencent Music could see changes following today’s earnings report.
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