Warner Music Group (WMG) AI Stock Analysis

• Market Cap: $15.32B
• Dividend Yield: 2.47%
• Average Volume (3M): 1.50M
• Price to Earnings (P/E): 34.2
• Beta (1Y): 0.68
• Revenue Growth: -0.91%
• EPS Growth: -14.87%
• Country: US
• Employees: 5,800
• Sector: Communication Services
• Sector Strength: 84
• Industry: Entertainment
• EPS (TTM): 0.12
• Shares Outstanding: 145,886,570
• 10 Day Avg. Volume: 1,722,029
• 30 Day Avg. Volume: 1,501,172
• PEG Ratio: 0.41
• Price to Book (P/B): 29.11
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.49
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $32.36
• Price Target Upside: 10.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 72 Outperform
• Price Target: $31.00 ▲(5.48%Upside)

Warner Music Group's overall score is influenced by strong financial performance and strategic corporate events that support future growth. However, high valuation, technical analysis concerns, and earnings call challenges in certain areas temper the overall outlook.

Positive Factors

Digital Revenue Growth

The launch of superfan subscription tiers at major DSPs is seen as a digital revenue growth catalyst.

Earnings Growth

Management's commitment to execution toward long-term share gains has increased conviction in the earnings growth outlook for FY2026.

M&A Activity

Plans to increase M&A activity, focusing on international market share, might offer growth opportunities.

Negative Factors

Market Share

Subscription growth trends are under pressure, leading to a challenging market share outlook in China.

Streaming Revenue

Warner Music Group reported disappointing F2Q25 results which were below revenue and adj. OIBDA expectations.

Subscription Streaming

Downgrade to Neutral on weaker outlook for subscription streaming.

Warner Music Group Business Overview & Revenue Model

Company Description

Warner Music Group Corp. operates as a music entertainment company in the United States, the United Kingdom, Germany, and internationally. The company operates through Recorded Music and Music Publishing segments. The Recorded Music segment is involved in the discovery and development of recording artists, as well as related marketing, promotion, distribution, sale, and licensing of music created by such recording artists; markets its music catalog through compilations and reissuances of previously released music and video titles, as well as previously unreleased materials; and conducts its operation primarily through a collection of record labels, such as Warner Records and Atlantic Records, as well as Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Fueled by Ramen, Nonesuch, Parlophone, Reprise, Roadrunner, Sire, Spinnin' Records, Warner Classics, and Warner Music Nashville. This segment markets, distributes, and sells music and video products to retailers and wholesale distributors; independent labels to retail and wholesale distributors; and various distribution centers and ventures, as well as retail outlets, online physical retailers, streaming services, and download services. The Music Publishing segment owns and acquires rights to approximately one million musical compositions comprising pop hits, American standards, folk songs, and motion picture and theatrical compositions. Its catalog includes approximately 100,000 songwriters and composers; and various genres, including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative, and gospel. This segment also administers the music and soundtracks of various third-party television and film producers and studios. The company was founded in 1929 and is headquartered in New York, New York.

How the Company Makes Money

WMG generates revenue primarily through its Recorded Music and Music Publishing segments. In the Recorded Music segment, the company earns money from the sale and streaming of recorded music, licensing of recordings, and merchandising. This includes revenue from digital platforms like Spotify and Apple Music, physical sales, and performance rights. The Music Publishing segment makes money by licensing compositions for use in media, covers, and public performances, as well as collecting royalties from various sources. WMG also benefits from strategic partnerships with digital service providers and collaborations with other entertainment entities, which enhance its distribution capabilities and expand its revenue streams.

Warner Music Group Financial Statement Overview

Summary

Warner Music Group has demonstrated strong revenue growth, with efficient cost management reflected in stable profit margins. However, the balance sheet indicates significant leverage, suggesting potential financial risks. The company generates consistent cash flow, supporting operations and debt obligations, but needs careful management of capital expenditures and financing strategies.

Income Statement

Warner Music Group has displayed a positive trajectory in its revenue growth over recent years, with a notable increase from $4.46 billion in 2020 to $6.34 billion TTM (Trailing-Twelve-Months) as of 2024. The gross profit margin is robust, reflecting efficient cost management. However, the net profit margin has shown fluctuations, attributed to varying net income levels, although it has stabilized recently. The EBIT and EBITDA margins are healthy, indicating strong operational performance.

Balance Sheet

The balance sheet reveals substantial leverage, with a high debt-to-equity ratio due to significant total debt and relatively low stockholders' equity, though equity has improved from previous losses. The return on equity is strong, reflecting improved profitability. The equity ratio indicates limited asset backing by equity, suggesting potential financial risk if liabilities grow.

Cash Flow

Cash flow analysis shows consistent free cash flow generation, with positive growth in free cash flow over recent years. The operating cash flow to net income ratio is favorable, indicating efficient conversion of net income into cash. Despite solid free cash flow, capital expenditures have impacted investing cash flow, necessitating careful management of financing activities.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	6.34B	6.43B	6.04B	5.92B	5.30B	4.46B
Gross Profit	2.89B	3.07B	2.86B	2.84B	2.56B	2.13B
EBITDA	1.39B	1.09B	1.16B	1.20B	915.00M	-59.00M
Net Income	512.00M	435.00M	430.00M	551.00M	304.00M	-475.00M
Balance Sheet
Total Assets	8.01B	9.15B	8.54B	7.83B	7.21B	6.41B
Cash, Cash Equivalents and Short-Term Investments	601.00M	694.00M	641.00M	584.00M	499.00M	553.00M
Total Debt	4.27B	4.29B	4.26B	4.01B	3.68B	3.44B
Total Liabilities	7.74B	8.48B	8.12B	7.66B	7.17B	6.46B
Stockholders Equity	252.00M	518.00M	307.00M	152.00M	31.00M	-63.00M
Cash Flow
Free Cash Flow	540.00M	638.00M	446.00M	416.00M	64.00M	338.00M
Operating Cash Flow	791.00M	754.00M	687.00M	742.00M	638.00M	463.00M
Investing Cash Flow	-300.00M	-311.00M	-300.00M	-824.00M	-638.00M	-219.00M
Financing Cash Flow	-430.00M	-396.00M	-325.00M	188.00M	-61.00M	-316.00M

Warner Music Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 29.39
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WMG, the sentiment is Neutral. The current price of 29.39 is above the 20-day moving average (MA) of 26.92, above the 50-day MA of 27.45, and below the 200-day MA of 30.44, indicating a neutral trend. The MACD of 0.34 indicates Negative momentum. The RSI at 71.37 is Negative, neither overbought nor oversold. The STOCH value of 88.93 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WMG.

Warner Music Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WMG	72 Outperform	$15.32B	34.16	89.20%	2.47%	-0.91%	-14.87%
RSVR	71 Outperform	$515.91M	67.24	2.16%	―	9.56%	1088.00%
Sector *	61 Neutral	$41.24B	-0.79	-14.21%	3.80%	2.39%	-73.52%
LGF.A	47 Neutral	$1.93B	―	168.75%	―	-2.85%	75.96%
LGF.B	42 Neutral	$1.93B	―	259.47%	―	-2.85%	75.96%
ANGH	41 Neutral	$33.42M	―	-270.84%	―	88.72%	-85.53%
LION	41 Neutral	$1.67B	―	19.96%	―	―	-285.78%

Warner Music Group Corporate Events

Warner Music Group Forms Joint Venture with Bain

On June 29, 2025, Warner Music Group‘s subsidiary, WMG BC Holdco LLC, entered into a joint venture agreement with Bain Capital’s subsidiary to form Beethoven JV 1 LLC, focusing on acquiring and managing music catalogs. This venture, with a $500 million equity commitment and additional debt financing, aims to enhance Warner Music’s catalog acquisition capabilities. Additionally, Warner Music announced cost-reduction measures to save $300 million annually by 2026, including headcount reductions and administrative cuts, to reinvest in growth and improve operational efficiency.

The most recent analyst rating on (WMG) stock is a Hold with a $35.00 price target. To see the full list of analyst forecasts on Warner Music Group stock, see the WMG Stock Forecast page.

Warner Music Group Declares Quarterly Cash Dividend

On May 16, 2025, Warner Music Group announced a regular quarterly cash dividend of $0.18 per share for its Class A and Class B Common Stock, payable on June 3, 2025, to shareholders recorded by May 27, 2025. This decision underscores Warner Music Group’s commitment to providing consistent returns to its investors, reflecting its stable financial performance and strategic positioning within the music industry.

The most recent analyst rating on (WMG) stock is a Hold with a $32.00 price target. To see the full list of analyst forecasts on Warner Music Group stock, see the WMG Stock Forecast page.

Warner Music Group Appoints New CFO Armin Zerza

On April 14, 2025, Warner Music Group announced that Armin Zerza will join as Executive Vice President and Chief Financial Officer effective May 5, succeeding Bryan Castellani, who will remain as an advisor to ensure a smooth transition. Zerza, with extensive experience from Activision Blizzard and Procter & Gamble, is expected to drive Warner Music Group’s long-term strategy and growth, leveraging his expertise in global financial operations and strategic value creation.