Upside case
Bull case
$90+926.0%
TME would need investors to value it at roughly 14x earnings — about 13x more generous than today's 1x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewHoldUpdated Jun 18, 2026
Tencent Music Entertainment Group (TME) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Hold
Covering
24
analysts
11 bullish · 1 bearish · 24 covering TME
Strong Buy
0
Buy
11
Hold
12
Sell
1
Strong Sell
0
Consensus Target
$18
+104.1% vs today
Scenario Range
$43 – $90
Model bear to bull value window
Coverage
24
Published analyst ratings
Valuation Context
1.4x
Forward P/E · Market cap $13.4B
TME price targets
Three scenarios for where TME stock could go
Current
~$9
Confidence
45 / 100
Updated
Jun 18, 2026
Where we are now
Current · $9
Bear
$43
Base
$68
Bull
$90
Market caseClosest to today
Base case
$68+678.7%
At 11x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$43+390.6%
The bear case assumes sentiment or fundamentals disappoint enough to push TME down roughly 391% from the current price.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Tencent Music Entertainment Group
TME · NYSECommunication ServicesInternet Content & InformationDecember year-end
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.
Market Cap
$13.4B
Revenue TTM
$32.0B
Net Income TTM
$10.8B
Net Margin
33.6%
TME Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
25%Exceptional
12 quarters tracked
Revenue Beat Rate
67%Exceptional
vs consensus estimates
Avg EPS Surprise
-2.7%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 3 of 4Q3 2025
EPS
$0.23/$0.20
Revenue
$1.2B/$1.1B
Q4 2025
EPS
$0.22/$0.21
Revenue
$1.2B/$1.2B
Q1 2026
EPS
$0.17/$0.23
Revenue
$179M/$1.2B
Q2 2026
EPS
$0.21/$0.21
Revenue
$168M/$1.1B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2025 | $0.23/$0.20 | +15.0% | $1.2B/$1.1B | +2.8% |
| Q4 2025 | $0.22/$0.21 | +4.8% | $1.2B/$1.2B | +0.2% |
| Q1 2026 | $0.17/$0.23 | -24.2% | $179M/$1.2B | -85.1% |
| Q2 2026 | $0.21/$0.21 | +0.0% | $168M/$1.1B | -85.3% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$36.3B
+13.5% YoY
FY2
$40.0B
+10.0% YoY
EPS Outlook
FY1
$7.06
+2.0% YoY
FY2
$7.55
+7.0% YoY
Trailing FCF (TTM)$7.8B
FCF Margin: 24.5%
Next Earnings
August 11, 2026
Expected EPS
$0.24
Expected Revenue
$1.3B
TME beat EPS estimates in 3 of 4 tracked quarters. A strong delivery record supports forward estimate credibility.
TME Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $27.3B
Product Mix
Latest annual revenue by segment or product family
Online Music Services
97.9%
+22.9% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
Segment breakdown not available for this company.
Online Music Services is the largest disclosed segment at 97.9% of FY 2025 revenue, up 22.9% YoY.
TME Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Cheap versus peers
Fair value est. $216 — implies +2375.2% from today's price.
Upside to Fair Value
2375.2%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
TME
8.5x
vs
S&P 500
24.4x
65% discount
vs Communication Services Trailing P/E
TME
8.5x
vs
Communication Services
15.3x
44% discount
vs TME 5Y Avg P/E
Today
8.5x
vs
5Y Average
3.1x
+174% premium
Forward PE
1.4x
S&P 500
18.8x
-93%
Communication Services
11.3x
-88%
5Y Avg
—
—
Trailing PE
8.5x
S&P 500
24.4x
-65%
Communication Services
15.3x
-44%
5Y Avg
3.1x
+174%
PEG Ratio
0.37x
S&P 500
1.66x
-77%
Communication Services
0.64x
-42%
5Y Avg
—
—
EV/EBITDA
7.7x
S&P 500
15.2x
-49%
Communication Services
9.6x
-19%
5Y Avg
1.6x
+383%
Price/FCF
9.2x
S&P 500
20.7x
-56%
Communication Services
11.4x
-19%
5Y Avg
2.7x
+235%
Price/Sales
2.8x
S&P 500
3.1x
-11%
Communication Services
1.0x
+171%
5Y Avg
0.6x
+391%
Dividend Yield
2.10%
S&P 500
1.91%
+10%
Communication Services
3.43%
-39%
5Y Avg
7.78%
-73%
| Metric | TME | S&P 500 | Communication Services | 5Y Avg TME |
|---|---|---|---|---|
| Forward PE | 1.4x | 18.8x-93% | 11.3x-88% | — |
| Trailing PE | 8.5x | 24.4x-65% | 15.3x-44% | 3.1x+174% |
| PEG Ratio | 0.37x | 1.66x-77% | 0.64x-42% | — |
| EV/EBITDA | 7.7x | 15.2x-49% | 9.6x-19% | 1.6x+383% |
| Price/FCF | 9.2x | 20.7x-56% | 11.4x-19% | 2.7x+235% |
| Price/Sales | 2.8x | 3.1x-11% | 1.0x+171% | 0.6x+391% |
| Dividend Yield | 2.10% | 1.91% | 3.43% | 7.78% |
TME trades above S&P 500 benchmarks on 0 of 6 measured multiples — appears modestly priced relative to the S&P 500 on most measures.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolTME Financial Health
Verdict
Strong
TME generates $7.8B in free cash flow at a 24.5% margin — 10.4% ROIC signals a durable competitive advantage · returns 2.8% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$32.0B
Revenue Growth
TTM vs prior year
+12.7%
Gross Margin
Gross profit as a share of revenue
57.0%
Operating Margin
Operating income divided by revenue
41.1%
Net Margin
Net income divided by revenue
33.6%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$6.92
Free Cash Flow (TTM)
Cash generation after capex
$7.8B
FCF Margin
FCF as share of revenue — the primary cash quality signal
24.5%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
10.4%
ROA
Return on assets, trailing twelve months
10.4%
Cash & Equivalents
Liquid assets on the balance sheet
$8.5B
Net Cash
Cash exceeds total debt — no net leverage
$4.7B
Debt Serviceability
Net debt as a multiple of annual free cash flow
Net cash ✓
ROE
Return on equity, trailing twelve months
13.0%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
2.8%
Dividend
2.1%
Buyback
0.7%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$653M
Dividend / Share
Annualized trailing dividend per share
$1.24
Payout Ratio
Share of earnings distributed as dividends
17.4%
Shares Outstanding
Declining as buybacks retire shares
1.5B
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageTME Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated June 18, 2026
High Risk
Competitive Pressure
Intensifying competition from platforms like NetEase Cloud Music threatens TME's market share and monetization health.
Medium
Monetization Challenges
Slowing subscription growth and ARPPU (average revenue per paying user) trends could signal weakening monetization.
High Risk
Regulatory Risks
As a Chinese tech conglomerate, TME faces potential regulatory crackdowns impacting operations and growth.
Medium
Market Sentiment
Negative stock price movements, such as the recent -7.78% decline, reflect bearish investor sentiment.
Lower
Operational Risks
Dependence on Tencent's ecosystem exposes TME to broader corporate risks and strategic shifts.
High Risk
Disclosed Risk Factors
TME reported 101 risk factors in its earnings, indicating significant operational and financial uncertainties.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why TME Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated June 18, 2026
Strong revenue growth
Tencent Music Entertainment Group is projected to have a revenue growth of 13.5%, indicating robust business expansion.
Bullish analyst sentiment
Analysts have a blended target price of $68 and a Strong Buy Score of 80%, reflecting positive outlook.
Innovative technology platform
Tencent leverages its internet-based platform to enrich user lives and drive digital upgrades, supporting long-term growth.
Market leadership in China
As a leading Chinese multinational technology conglomerate, Tencent Music benefits from strong market positioning and brand recognition.
AI-driven stock potential
AI analysis predicts a bullish 12-month outlook for Tencent Music, with strong fundamentals supporting future price appreciation.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
TME Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$8.73
52W Range Position
2%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$8.44
+3.4% from the low
52-Week High
$26.70
-67.3% from the high
1 Month
-3.64%
3 Month
-15.24%
YTD
-51.1%
1 Year
-53.1%
3Y CAGR
+5.0%
5Y CAGR
-10.4%
10Y CAGR
-4.6%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
TME vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
1.4x
vs 34.0x median
-96% below peer median
Revenue Growth
+13.5%
vs +11.4% median
+19% above peer median
Net Margin
33.6%
vs 27.2% median
+24% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
TME TME Tencent Music Entertainment Group | $13.4B | 1.4x | +13.5% | 33.6% | Hold | +104.1% |
SPO SPOT Spotify Technology S.A. | $96.3B | 36.6x | +12.3% | 15.5% | Buy | +31.3% |
IDC IDCC InterDigital, Inc. | $7.6B | 41.1x | +10.8% | 44.2% | Buy | +52.0% |
AAP AAPL Apple Inc. | $4.38T | 34.0x | +6.8% | 27.2% | Buy | +9.6% |
AMZ AMZN Amazon.com, Inc. | $2.63T | 27.8x | +11.4% | 12.2% | Buy | +25.9% |
GOO GOOGL Alphabet Inc. | $4.45T | 25.9x | +14.6% | 37.9% | Buy | +11.9% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
TME Dividend and Capital Return
TME returns 2.8% total yield, led by a 2.10% dividend. Buybacks add another 0.7%.
Dividend SustainableFCF Well Covered
Total Shareholder Yield
2.8%
Dividend + buyback return per year
Buyback Yield
0.7%
Dividend Yield
2.10%
Payout Ratio
17.4%
How TME Splits Its Return
Div 2.10%
Buyback 0.7%
Dividend 2.10%Buybacks 0.7%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$1.24
Growth Streak
Consecutive years of dividend increases
2Y
3Y Div CAGR
—
5Y Div CAGR
—
Ex-Dividend Date
—
Payment Cadence
Semi-Annual
2 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$653M
Estimated Shares Retired
75M
Approx. Share Reduction
4.9%
Shares Outstanding
Current diluted share count from the screening snapshot
1.5B
At 4.9%/year, buybacks mechanically lift EPS even with flat earnings — each remaining share represents a slightly larger piece of the company.
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $0.48 | — | — | — |
| 2025 | $0.18 | +31.4% | 2.4% | 9.5% |
| 2024 | $0.14 | — | 10.8% | 19.3% |
FAQ
7 questionsTME Investor Questions
Common questions answered from live analyst data and company financials.
01Is Tencent Music Entertainment Group (TME) stock a buy or sell in 2026?
Tencent Music Entertainment Group (TME) is rated Hold by Wall Street analysts as of 2026. Of 24 analysts covering the stock, 11 rate it Buy or Strong Buy, 12 rate it Hold, and 1 rate it Sell or Strong Sell. The consensus 12-month price target is $18, implying +104.1% from the current price of $9. The bear case scenario is $43 and the bull case is $90.
02What is the TME stock price target for 2026?
The Wall Street consensus price target for TME is $18 based on 24 analyst estimates. The high-end target is $25 (+186.4% from today), and the low-end target is $11 (+22.6%). The base case model target is $68.
03Is Tencent Music Entertainment Group (TME) stock overvalued in 2026?
TME trades at 1.4x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals cheap versus peers. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Tencent Music Entertainment Group (TME) stock in 2026?
The primary risks for TME in 2026 are: (1) Competitive Pressure — Intensifying competition from platforms like NetEase Cloud Music threatens TME's market share and monetization health. (2) Regulatory Risks — As a Chinese tech conglomerate, TME faces potential regulatory crackdowns impacting operations and growth. (3) Disclosed Risk Factors — TME reported 101 risk factors in its earnings, indicating significant operational and financial uncertainties. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Tencent Music Entertainment Group's revenue and earnings forecast?
Analyst consensus estimates TME will report consensus revenue of $36.3B (+13.5% year-over-year) and EPS of $7.06 (+2.0% year-over-year) for the upcoming fiscal year. The following year, analysts project $40.0B in revenue.
06When does Tencent Music Entertainment Group (TME) report its next earnings?
Tencent Music Entertainment Group is expected to report its next earnings on approximately 2026-08-11. Consensus expects EPS of $0.24 and revenue of $1.3B. Over recent quarters, TME has beaten EPS estimates 25% of the time.
07How much free cash flow does Tencent Music Entertainment Group generate?
Tencent Music Entertainment Group (TME) generated $7.8B in free cash flow over the trailing twelve months — a free cash flow margin of 24.5%. TME returns capital to shareholders through dividends (2.1% yield) and share repurchases ($653M TTM).