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Universal Music Group (UMGNF)
OTHER OTC:UMGNF
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Positive Factors
Market Positioning
UMG is seen as a clear winner via its superstar roster with the expected materialization of Superfan tiers.
Partnership Agreements
An early renewal of UMG / SPOT's deal signals stronger monetization for UMG and raises questions for SPOT.
Strategic Partnerships
The new SPOT and AMZN deals should drive accelerated revenue growth, with Superfan tiers as a potential upside driver.
Subscription Revenue
UMG posted subscription revenue growth of +7.2% Y/Y, which was ahead of Street expectations, despite recent fears of a slowdown.
Negative Factors
Ad-Supported Streaming
Ad-supported streaming revenues remained flat year-on-year, falling short of expectations due to monetization challenges.
Streaming Performance
Streaming performance was weaker than expected, which the company anticipates will continue.
Universal Music Group (UMGNF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$57.28B
Dividend Yield1.8%
Average Volume (3M)4.40K
Price to Earnings (P/E)25.3
Beta (1Y)0.66
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees9,636
SectorCommunication Services
Sector Strength86
IndustryEntertainment
Share Statistics
EPS (TTM)0.26
Shares Outstanding1,834,099,900
10 Day Avg. Volume5,206
30 Day Avg. Volume4,397
Financial Highlights & Ratios
PEG Ratio2.04
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio24.16
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$34.25Price Target Upside9.56% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Universal Music Group Business Overview & Revenue Model
Company DescriptionUniversal Music Group N.V. operates as a music company worldwide. It operates through Recorded Music, Music Publishing, and Merchandising & Other segments. The Recorded Music segment discovers and develops recording artists, as well as markets and promotes their music across various formats and platforms; and engages in the live events, sponsorship, film, and television operations. The Music Publishing segment discovers and develops songwriters, as well as owns and administers the copyright for musical compositions used in recordings, public performances, and related uses, such as films and advertisements. The Merchandising & Other segment produces and sells artist and other branded products through various sales channels, including fashion retail, concert touring, and internet, as well as offers brand rights management services. The company has approximately 3 million recordings, 4 million owned and administered titles, and 250 artists/brands, as well as owns approximately 50 labels covering various music genres. The company was incorporated in 2020 and is headquartered in Hilversum, the Netherlands.
How the Company Makes Money
Universal Music Group Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 10.30%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Positive
Universal Music Group reported a strong start to 2025 with significant revenue growth driven by subscription and physical sales. The global expansion strategy showed impressive results, particularly in key markets. However, challenges remain in monetizing ad-supported streaming and merchandising revenue, with some impact on margins due to repertoire mix.Q1-2025 Updates
Positive Updates
Strong Financial Start
Revenue is up 9.5% and adjusted EBITDA is up 10% for the first quarter of 2025.
Global Expansion and Streaming Growth
Subscription revenue grew by 9.3%, with double-digit revenue growth from four major DSP partners, particularly in markets like Japan, Germany, China, and Mexico.
Significant Artist Achievements
UMG had seven of the top 10 albums in the US, and six of the top 10 albums in the UK for the quarter. Notable artists like Kendrick Lamar, The Weeknd, and Lady Gaga had successful releases.
Japan Market Success
UMG swept main categories at the 39th Annual Gold Disc Award in Japan, highlighting strong regional management and artist roster.
Physical Sales Growth
Physical sales, driven by vinyl, grew by 15% year-over-year.
Negative Updates
Flat Growth in Ad-Supported Streaming
Ad-supported streaming revenue was largely flat, up only 0.3% due to challenges in monetizing short-form content.
Decline in Merchandising Revenue
Merchandising revenue declined by 5%, impacted by a difficult comparison with previous touring merch sales.
Negative Repertoire Mix Impact
The revenue and repertoire mix negatively impacted margins due to strong growth in lower-margin segments like physical sales.
Company Guidance
In Universal Music Group's first quarter earnings call for 2025, Sir Lucian Grainge and Boyd Muir highlighted several key metrics showcasing the company's robust performance. Revenue increased by 9.5% to €2.9 billion, while adjusted EBITDA rose by 10% to €661 million. Subscription revenue grew by 9.3%, with significant contributions from developed markets like the U.S. and Japan, as well as emerging markets such as China and Mexico. The company also saw double-digit revenue growth from four major DSP partners. Recorded music revenue climbed by 10.3%, driven by subscription, physical sales, and licensing. Meanwhile, music publishing revenue was up by 9.5%, fueled by a 17% rise in digital revenue. Despite a 5% decline in merchandising revenue, UMG's strategic initiatives, including streaming 2.0 and global expansion, continue to support its midterm financial objectives, with plans for an additional €125 million in cost savings as part of its organizational redesign.Universal Music Group Financial Statement Overview
Summary
Income Statement
Balance Sheet
Cash Flow
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 14.47B | 11.83B | 11.11B | 10.34B | 8.50B | 7.43B | Gross Profit |
| 6.06B | 5.09B | 4.52B | 4.59B | 3.90B | 3.52B | EBIT |
| 2.14B | 1.77B | 1.45B | 1.60B | 1.41B | 1.25B | EBITDA |
| 3.71B | 3.47B | 2.22B | 1.35B | 1.49B | 2.07B | Net Income Common Stockholders |
| 1.86B | 2.09B | 1.26B | 782.00M | 886.00M | 1.37B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 90.75M | 553.00M | 504.00M | 66.00M | 585.00M | 327.00M | Total Assets |
| 2.21B | 0.00 | 13.09B | 11.64B | 12.09B | 10.99B | Total Debt |
| 152.75M | 1.90B | 2.51B | 2.67B | 3.10B | 3.53B | Net Debt |
| 68.75M | 1.34B | 2.10B | 2.61B | 2.51B | 3.21B | Total Liabilities |
| 1.46B | 0.00 | 10.11B | 9.29B | 10.06B | 9.55B | Stockholders Equity |
| 746.25M | 0.00 | 2.96B | 2.35B | 2.03B | 1.43B |
| Cash Flow | Free Cash Flow | ||||
| 2.09B | 1.31B | 1.59B | 1.64B | 1.08B | -69.00M | Operating Cash Flow |
| 2.29B | 1.75B | 1.89B | 1.73B | 1.14B | -3.00M | Investing Cash Flow |
| -1.34B | -1.05B | -622.00M | -520.00M | -391.00M | -46.00M | Financing Cash Flow |
| -1.19B | -552.00M | -1.20B | -1.35B | -1.34B | 217.00M |
Universal Music Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| $57.28B | 25.32 | 56.71% | 1.80% | ― | ― | ||
77 Outperform | $33.41B | 49.13 | 827.53% | ― | -2.92% | 166.63% | |
76 Outperform | $25.86B | 20.97 | 14.37% | 0.97% | 4.59% | 83.27% | |
76 Outperform | $143.01B | 115.09 | 24.28% | ― | 16.07% | ― | |
64 Neutral | $13.75B | 30.65 | 89.20% | 2.73% | -0.91% | -14.87% | |
61 Neutral | $326.05M | ― | -12.13% | 1.59% | -4.04% | 84.17% | |
61 Neutral | $14.60B | 5.88 | -4.32% | 3.68% | 2.75% | -30.55% | |
52 Neutral | $4.59B | 971.65 | -20.85% | ― | 14.64% | -79.70% |
* Communication Services Sector Average
Performance Comparison
UMGNF
Universal Music Group
31.15
0.47
1.53%
WMG
Warner Music Group
26.21
-3.76
-12.55%
SPOT
Spotify
699.11
390.11
126.25%
TME
Tencent Music Entertainment Group
18.51
4.44
31.56%
LYV
Live Nation Entertainment
143.48
53.73
59.87%
CURI
CuriosityStream
5.82
4.90
532.61%
MSGS
Madison Square Garden Sports
189.98
3.50
1.88%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.