Tencent Music Entertainment Group (TME)
NYSE:TME
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Tencent Music Entertainment Group
(NYSE:TME)
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Rating:72Outperform
Price Target:
$11.00
▲(9.13% Upside)
Action:ReiteratedDate:04/21/26
The score is driven primarily by strong underlying financial performance (rising profitability with low leverage) and a supportive valuation profile (moderate P/E with a ~2.4% dividend). These positives are tempered by weak technicals (downtrend signals) and earnings-call guidance pointing to competitive subscription pressure and slightly softer margins in 2026.
Positive Factors
Margin Expansion / Profitability
Sustained gross and net margin expansion indicates stronger monetization and operating leverage across the platform. Higher margins boost cash generation, fund content and tech investment, support dividends/shareholder returns and provide a buffer versus pricing or royalty pressure over the medium term.
Negative Factors
Subscription Revenue Pressure
Intensifying competition that puts subscription growth under pressure can erode a key recurring revenue stream and margin profile. Slower subscription growth raises reliance on lower-margin or more volatile non-subscription channels, complicating long-term revenue visibility and unit economics.
Read all positive and negative factors
Positive Factors
Negative Factors
Margin Expansion / Profitability
Sustained gross and net margin expansion indicates stronger monetization and operating leverage across the platform. Higher margins boost cash generation, fund content and tech investment, support dividends/shareholder returns and provide a buffer versus pricing or royalty pressure over the medium term.
Read all positive factors
Tencent Music Entertainment Group (TME) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.25B
Dividend Yield1.02%
Average Volume (3M)12.56M
Price to Earnings (P/E)24.7
Beta (1Y)0.95
Revenue Growth16.03%
EPS Growth69.80%
CountryUS
Employees5,353
SectorCommunication Services
Sector Strength97
IndustryInternet Content & Information
Share Statistics
EPS (TTM)7.00
Shares Outstanding741,429,900
10 Day Avg. Volume8,012,471
30 Day Avg. Volume12,564,043
Financial Highlights & Ratios
PEG Ratio0.28
Price to Book (P/B)2.34
Price to Sales (P/S)5.87
P/FCF Ratio19.06
Enterprise Value/Market Cap7.47
Enterprise Value/Revenue3.09
Enterprise Value/Gross Profit5.42
Enterprise Value/Ebitda7.53
Forecast
1Y Price Target
$16.58Price Target Upside64.50% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)6.12
Revenue Forecast (FY)$36.06B
Tencent Music Entertainment Group Business Overview & Revenue Model
Company Description
Tencent Music Entertainment Group operates online music entertainment platforms to provide music streaming, online karaoke, and live streaming services in the People's Republic of China. It offers QQ Music, Kugou Music, and Kuwo Music that enable ...
How the Company Makes Money
TME primarily generates revenue from a mix of (1) online music services and (2) social entertainment services. Online music services monetize through paid subscriptions and related music-streaming offerings, where users pay recurring fees for prem...
Tencent Music Entertainment Group Earnings Call Summary
Earnings Call Date:Mar 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 12, 2026
Earnings Call Sentiment Positive
The call presented a broadly positive operational and financial picture: double-digit revenue growth across both quarter and full year, margin expansion, strong net profit gains, successful scaling of SVIP membership (>20 million) and notable traction in non-subscription monetization (live events, merchandise, advertising). Management also highlighted significant AI adoption and creator platform scale. Key risks were acknowledged — short-term subscription pressure from competition, AI-driven content and copyright challenges, a very high Q4 effective tax rate, a modest decline in social entertainment revenue, and reduced quarterly disclosure of some operating metrics. On balance, the company demonstrated solid growth and profitability momentum while transparently outlining the main near-term challenges and strategic responses.Positive Updates
Revenue Growth — Q4 and Full Year 2025
Total revenues grew 15% YoY to RMB 8.6 billion in Q4 2025; full-year 2025 total revenues were RMB 32.9 billion, up 16% YoY.
Negative Updates
Decline in Social Entertainment and Other Revenues
Revenues from social entertainment service and others were RMB 1.5 billion in Q4 2025, down 5% YoY.
Read all updates
Q4-2025 Updates
Positive
Negative
Revenue Growth — Q4 and Full Year 2025
Total revenues grew 15% YoY to RMB 8.6 billion in Q4 2025; full-year 2025 total revenues were RMB 32.9 billion, up 16% YoY.
Read all positive updates
Company Guidance
Guidance: management said it will continue investing in content and technology while focusing on IP development, but expects 2026 gross profit margin to be roughly flat-to-slightly below 2025’s 44.2% (Q4: 44.7%), with operating profit margin and overall net-profit margin broadly similar to 2025 (though possibly a bit lower), and that subscription revenue may face short‑term pressure amid competition even as non‑subscription lines (ads, live events, merchandise) keep scaling; they highlighted strategic levers including the >20 million SVIP base, the AD‑supported plan piloted in late 2025, continued ROI‑focused marketing, a combined cash balance of ~RMB38.0 billion, and a declared 2025 dividend of USD0.24 per ADS (~USD368 million) to be paid in Q2 2026, and said certain operating metrics will no longer be disclosed quarterly (total paying users will be reported annually as of year‑end).Tencent Music Entertainment Group Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
88
Very Positive
Cash Flow
76
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 32.01B | 28.40B | 27.75B | 28.34B | 31.24B |
| Gross Profit | 18.24B | 12.03B | 9.79B | 8.77B | 9.40B |
| EBITDA | 14.77B | 9.81B | 5.72B | 5.65B | 4.75B |
| Net Income | 10.75B | 6.64B | 4.92B | 3.68B | 3.03B |
Balance Sheet | |||||
| Total Assets | 102.59B | 90.44B | 75.54B | 67.01B | 67.25B |
| Cash, Cash Equivalents and Short-Term Investments | 24.35B | 27.21B | 23.54B | 20.88B | 20.43B |
| Total Debt | 3.82B | 6.05B | 6.05B | 5.96B | 5.36B |
| Total Liabilities | 19.48B | 20.72B | 18.33B | 17.88B | 16.20B |
| Stockholders Equity | 80.34B | 67.86B | 55.91B | 48.10B | 50.32B |
Cash Flow | |||||
| Free Cash Flow | 9.86B | 9.24B | 6.17B | 6.43B | 2.48B |
| Operating Cash Flow | 10.16B | 10.28B | 7.34B | 7.48B | 5.24B |
| Investing Cash Flow | -10.27B | -6.82B | -1.86B | -1.45B | -6.00B |
| Financing Cash Flow | -4.41B | -3.83B | -1.54B | -3.42B | -3.71B |
Tencent Music Entertainment Group Technical Analysis
Negative
10.08
Price Trends
12.23
Negative
14.68
Negative
18.42
Negative
Market Momentum
-0.65
Negative
44.36
Neutral
92.18
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TME, the sentiment is Negative. The current price of 10.08 is above the 20-day moving average (MA) of 9.43, below the 50-day MA of 12.23, and below the 200-day MA of 18.42, indicating a neutral trend. The MACD of -0.65 indicates Negative momentum. The RSI at 44.36 is Neutral, neither overbought nor oversold. The STOCH value of 92.18 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TME.
Tencent Music Entertainment Group Risk Analysis
Tencent Music Entertainment Group disclosed 101 risk factors in its most recent earnings report. Tencent Music Entertainment Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
The AI industry faces changing and extensive regulations. Integrating AI into our offerings could lead to potential infringement claims and higher costs for regulatory compliance. Q4, 2023
Tencent Music Entertainment Group Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $13.25B | 24.71 | 13.77% | 1.02% | 16.03% | 69.80% | |
70 Outperform | $3.01B | 15.37 | 31.92% | 4.25% | -4.86% | ― | |
70 Outperform | $2.06B | -128.91 | 12.13% | 8.13% | 0.36% | 48.25% | |
69 Neutral | $87.53B | 29.44 | 35.34% | ― | 16.70% | 148.31% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
56 Neutral | $46.45B | 62.07 | 1.73% | ― | -2.93% | -81.11% | |
44 Neutral | $146.82M | 265.33 | -1.46% | ― | -10.52% | 90.28% |
* Communication Services Sector Average
TME
Tencent Music Entertainment Group
9.67
-4.18
-30.18%
BIDU
Baidu
140.59
52.94
60.40%
JOYY
JOYY
60.27
20.39
51.14%
WB
Weibo
8.47
0.47
5.93%
SPOT
Spotify
425.25
-230.01
-35.10%
DOYU
DouYu International Holdings
4.87
-2.43
-33.26%
Tencent Music Entertainment Group Corporate Events
Tencent Music Entertainment Files 2025 Annual Report with U.S. SEC
Apr 17, 2026
Tencent Music Entertainment Group, the leading online music and audio platform in China, runs major apps such as QQ Music, Kugou Music, Kuwo Music and WeSing, and focuses on integrating music and technology across streaming, karaoke, live streamin...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.