Comprehensive Stock Comparison
Compare Tencent Music Entertainment Group (TME) vs Netflix, Inc. (NFLX) Stock
Analyze side-by-side fundamentals, valuation, growth, and profitability to decide which stock is the better buy.
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Quick Verdict
| Category | Winner | Why |
|---|---|---|
| Growth | NFLX | 15.9% revenue growth vs TME's 2.3% |
| Value | TME | Lower P/E (2.3x vs 30.8x), PEG 0.19 vs 0.93 |
| Quality / Margins | TME | 34.1% net margin vs NFLX's 24.3% |
| Stability / Safety | NFLX | Beta 0.76 vs TME's 0.87 |
| Dividends | TME | 1.0% yield; 3-year raise streak; NFLX pays no meaningful dividend |
| Momentum (1Y) | TME | +21.2% vs NFLX's -1.9% |
| Efficiency (ROA) | NFLX | 19.8% ROA vs TME's 10.3%, ROIC 29.8% vs 11.6% |
Who Each Stock Is For
Income & stability
Growth exposure
Long-term compounding (10Y)
Sleep-well-at-night portfolio
Valuation efficiency (growth/$)
Defensive / Recession hedge
Business Model
What each company does and how it makes money
Tencent Music Entertainment operates China's largest online music entertainment ecosystem, providing music streaming, social karaoke, and live streaming services. It generates revenue primarily through music subscriptions (about 40% of revenue), social entertainment services like virtual gifting on live streams (about 60%), and advertising. Its key advantage is exclusive access to Tencent's vast music library and integration with WeChat's massive user base, creating a powerful network effect in China's music market.
Netflix is a global streaming entertainment service that offers original and licensed TV shows, movies, and documentaries. It generates revenue primarily through subscription fees — with three pricing tiers — and earns additional income from licensing its original content to other platforms. Its key advantage is its massive scale and data-driven content creation, which allows it to invest billions in programming that attracts and retains subscribers worldwide.
Revenue Breakdown by Segment
How each company's revenue is distributed across its business units
Financial Metrics Comparison
Side-by-side fundamentals across 2 stocks. BestLagging
Financial Scorecard
TME leads in 2 of 6 categories (Financial Metrics, Valuation Metrics). NFLX leads in 2 (Total Returns, Risk & Volatility). 1 tied.
Financial Metrics (TTM)
NFLX and TME operate at a comparable scale, with $45.2B and $31.7B in trailing revenue. TME is the more profitable business, keeping 34.1% of every revenue dollar as net income compared to NFLX's 24.3%. On growth, TME holds the edge at +20.6% YoY revenue growth, suggesting stronger near-term business momentum.
| Metric | TMETencent Music Ent… | NFLXNetflix, Inc. |
|---|---|---|
| RevenueTrailing 12 months | $31.7B | $45.2B |
| EBITDAEarnings before interest/tax | $13.4B | $30.1B |
| Net IncomeAfter-tax profit | $10.8B | $11.0B |
| Free Cash FlowCash after capex | $10.0B | $9.5B |
| Gross MarginGross profit ÷ Revenue | +43.9% | +48.5% |
| Operating MarginEBIT ÷ Revenue | +40.8% | +29.5% |
| Net MarginNet income ÷ Revenue | +34.1% | +24.3% |
| FCF MarginFCF ÷ Revenue | +31.5% | +20.9% |
| Rev. Growth (YoY)Latest quarter vs prior year | +20.6% | +17.6% |
| EPS Growth (YoY)Latest quarter vs prior year | +38.0% | +31.1% |
Valuation Metrics
At 23.6x trailing earnings, TME trades at a 38% valuation discount to NFLX's 38.0x P/E. Adjusting for growth (PEG ratio), NFLX offers better value at 1.15x vs TME's 1.93x — a lower PEG means you pay less per unit of expected earnings growth.
| Metric | TMETencent Music Ent… | NFLXNetflix, Inc. |
|---|---|---|
| Market CapShares × price | $10.3B | $407.8B |
| Enterprise ValueMkt cap + debt − cash | $9.3B | $413.2B |
| Trailing P/EPrice ÷ TTM EPS | 23.62x | 38.04x |
| Forward P/EPrice ÷ next-FY EPS est. | 2.27x | 30.75x |
| PEG RatioP/E ÷ EPS growth rate | 1.93x | 1.15x |
| EV / EBITDAEnterprise value multiple | 6.59x | 13.74x |
| Price / SalesMarket cap ÷ Revenue | 2.50x | 9.03x |
| Price / BookPrice ÷ Book value/share | 2.25x | 15.61x |
| Price / FCFMarket cap ÷ FCF | 7.68x | 43.10x |
Profitability & Efficiency
NFLX delivers a 41.3% return on equity — every $100 of shareholder capital generates $41 in annual profit, vs $13 for TME. TME carries lower financial leverage with a 0.09x debt-to-equity ratio, signaling a more conservative balance sheet compared to NFLX's 0.54x.
| Metric | TMETencent Music Ent… | NFLXNetflix, Inc. |
|---|---|---|
| ROE (TTM)Return on equity | +12.7% | +41.3% |
| ROA (TTM)Return on assets | +10.3% | +19.8% |
| ROICReturn on invested capital | +11.6% | +29.8% |
| ROCEReturn on capital employed | +12.7% | +30.5% |
| Piotroski ScoreFundamental quality 0–9 | 7 | 7 |
| Debt / EquityFinancial leverage | 0.09x | 0.54x |
| Net DebtTotal debt minus cash | -$7.1B | $5.4B |
| Cash & Equiv.Liquid assets | $13.2B | $9.0B |
| Total DebtShort + long-term debt | $6.1B | $14.5B |
| Interest CoverageEBIT ÷ Interest expense | 802.03x | 17.33x |
Total Returns (with DRIP)
A $10,000 investment in NFLX five years ago would be worth $17,479 today (with dividends reinvested), compared to $5,539 for TME. Over the past 12 months, TME leads with a +21.2% total return vs NFLX's -1.9%. The 3-year compound annual growth rate (CAGR) favors NFLX at 44.0% vs TME's 25.5% — a key indicator of consistent wealth creation.
| Metric | TMETencent Music Ent… | NFLXNetflix, Inc. |
|---|---|---|
| YTD ReturnYear-to-date | -18.3% | +5.8% |
| 1-Year ReturnPast 12 months | +21.2% | -1.9% |
| 3-Year ReturnCumulative with dividends | +97.8% | +198.8% |
| 5-Year ReturnCumulative with dividends | -44.6% | +74.8% |
| 10-Year ReturnCumulative with dividends | +6.5% | +930.4% |
| CAGR (3Y)Annualised 3-year return | +25.5% | +44.0% |
Risk & Volatility
NFLX is the less volatile stock with a 0.76 beta — it tends to amplify market swings less than TME's 0.87 beta. A beta below 1.0 means the stock typically moves less than the S&P 500. NFLX currently trades 71.8% from its 52-week high vs TME's 54.7% drawdown — a narrower gap to the peak suggests stronger recent price momentum.
| Metric | TMETencent Music Ent… | NFLXNetflix, Inc. |
|---|---|---|
| Beta (5Y)Sensitivity to S&P 500 | 0.87x | 0.76x |
| 52-Week HighHighest price in past year | $26.70 | $134.12 |
| 52-Week LowLowest price in past year | $11.71 | $75.01 |
| % of 52W HighCurrent price vs 52-week peak | +54.7% | +71.8% |
| RSI (14)Momentum oscillator 0–100 | 35.2 | 55.8 |
| Avg Volume (50D)Average daily shares traded | 5.0M | 38.8M |
Analyst Outlook
Wall Street rates TME as "Buy" and NFLX as "Buy". Consensus price targets imply 71.2% upside for TME (target: $25) vs 21.8% for NFLX (target: $117). TME is the only dividend payer here at 0.96% yield — a key consideration for income-focused portfolios.
| Metric | TMETencent Music Ent… | NFLXNetflix, Inc. |
|---|---|---|
| Analyst RatingConsensus buy/hold/sell | Buy | Buy |
| Price TargetConsensus 12-month target | $25.00 | $117.25 |
| # AnalystsCovering analysts | 24 | 97 |
| Dividend YieldAnnual dividend ÷ price | +1.0% | — |
| Dividend StreakConsecutive years of raises | 3 | — |
| Dividend / ShareAnnual DPS | $0.96 | — |
| Buyback YieldShare repurchases ÷ mkt cap | +2.7% | +2.2% |
Historical Charts
Charts are rendered on first load. Hover for details.
Chart 1Total Return — 5 Years (Rebased to 100)
| Stock | Mar 20 | Feb 26 | Change |
|---|---|---|---|
| Tencent Music Enter… (TME) | 100 | 136.44 | +36.4% |
| Netflix, Inc. (NFLX) | 100 | 217.16 | +117.2% |
Netflix, Inc. (NFLX) returned +75% over 5 years vs Tencent Music Enter… (TME)'s -45%. A $10,000 investment in NFLX 5 years ago would be worth $17,479 today (including dividends reinvested).
Chart 2Revenue Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Tencent Music Enter… (TME) | $4.4B | $28.4B | +551.2% |
| Netflix, Inc. (NFLX) | $8.8B | $45.2B | +411.7% |
Netflix, Inc.'s revenue grew from $8.8B (2016) to $45.2B (2025) — a 19.9% CAGR.
Chart 3Net Margin Trend — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Tencent Music Enter… (TME) | 1.9% | 23.4% | +1144.1% |
| Netflix, Inc. (NFLX) | 2.1% | 24.3% | +1049.7% |
Netflix, Inc.'s net margin went from 2% (2016) to 24% (2025).
Chart 4P/E Ratio History — 9 Years
| Stock | 2017 | 2025 | Change |
|---|---|---|---|
| Tencent Music Enter… (TME) | 11.4 | 2.7 | -76.3% |
| Netflix, Inc. (NFLX) | 153.6 | 37.1 | -75.8% |
Tencent Music Entertainment Group has traded in a 3x–11x P/E range over 7 years; current trailing P/E is ~24x. Netflix, Inc. has traded in a 30x–154x P/E range over 9 years; current trailing P/E is ~38x.
Chart 5EPS Growth — 10 Years
| Stock | 2016 | 2025 | Change |
|---|---|---|---|
| Tencent Music Enter… (TME) | 0.05 | 4.24 | +8363.1% |
| Netflix, Inc. (NFLX) | 0.04 | 2.53 | +5783.7% |
Netflix, Inc.'s EPS grew from $0.04 (2016) to $2.53 (2025) — a 57% CAGR.
Chart 6Free Cash Flow — 5 Years
Tencent Music Entertainment Group generated $9B FCF in 2024 (+273% vs 2021). Netflix, Inc. generated $9B FCF in 2025 (+7269% vs 2021).
TME vs NFLX: Frequently Asked Questions
9 questions · data-driven answers · updated daily
01Is TME or NFLX a better buy right now?
Tencent Music Entertainment Group (TME) offers the better valuation at 23.6x trailing P/E (2.3x forward), making it the more compelling value choice. Analysts rate Tencent Music Entertainment Group (TME) a "Buy" — based on 24 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.
02Which has the better valuation — TME or NFLX?
On trailing P/E, Tencent Music Entertainment Group (TME) is the cheapest at 23.6x versus Netflix, Inc. at 38.0x. On forward P/E, Tencent Music Entertainment Group is actually cheaper at 2.3x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Tencent Music Entertainment Group wins at 0.19x versus Netflix, Inc.'s 0.93x — a PEG below 1.0 traditionally signals the market is underpricing earnings growth.
03Which is the better long-term investment — TME or NFLX?
Over the past 5 years, Netflix, Inc. (NFLX) delivered a total return of +74.8%, compared to -44.6% for Tencent Music Entertainment Group (TME). A $10,000 investment in NFLX five years ago would be worth approximately $17K today (assuming dividends reinvested). Over 10 years, the gap is even starker: NFLX returned +930.4% versus TME's +6.5%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.
04Which is safer — TME or NFLX?
By beta (market sensitivity over 5 years), Netflix, Inc. (NFLX) is the lower-risk stock at 0.76β versus Tencent Music Entertainment Group's 0.87β — meaning TME is approximately 14% more volatile than NFLX relative to the S&P 500. On balance sheet safety, Tencent Music Entertainment Group (TME) carries a lower debt/equity ratio of 9% versus 54% for Netflix, Inc. — giving it more financial flexibility in a downturn.
05Which has better profit margins — TME or NFLX?
Netflix, Inc. (NFLX) is the more profitable company, earning 24.3% net margin versus 23.4% for Tencent Music Entertainment Group — meaning it keeps 24.3% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: TME leads at 30.7% versus 29.5% for NFLX. At the gross margin level — before operating expenses — NFLX leads at 48.5%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.
06Is TME or NFLX more undervalued right now?
The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential. By this metric, Tencent Music Entertainment Group (TME) is the more undervalued stock at a PEG of 0.19x versus Netflix, Inc.'s 0.93x. A PEG below 1.0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Tencent Music Entertainment Group (TME) trades at 2.3x forward P/E versus 30.8x for Netflix, Inc. — 28.5x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for TME: 71.2% to $25.00.
07Which pays a better dividend — TME or NFLX?
In this comparison, TME (1.0% yield) pays a dividend. NFLX does not pay a meaningful dividend and should not be held primarily for income.
08Is TME or NFLX better for a retirement portfolio?
For long-horizon retirement investors, Netflix, Inc. (NFLX) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0.76), +930.4% 10Y return). Both have compounded well over 10 years (NFLX: +930.4%, TME: +6.5%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.
09What are the main differences between TME and NFLX?
Both stocks operate in the Communication Services sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both. TME pays a dividend while NFLX does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.
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