Upside case
Bull case
$58+91.0%
WMG would need investors to value it at roughly 44x earnings — about 21x more generous than today's 23x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
Warner Music Group Corp. (WMG) 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
Buy
Covering
24
analysts
16 bullish · 1 bearish · 24 covering WMG
Strong Buy
0
Buy
16
Hold
7
Sell
1
Strong Sell
0
Consensus Target
$36
+17.0% vs today
Scenario Range
— – $58
Model bear to bull value window
Coverage
24
Published analyst ratings
Valuation Context
22.9x
Forward P/E · Market cap $15.9B
WMG price targets
Three scenarios for where WMG stock could go
Current
~$30
Confidence
57 / 100
Updated
May 1, 2026
Where we are now
Current · $30
Base
$42
Bull
$58
Market caseClosest to today
Base case
$42+39.5%
At 32x 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
—
The bear case reflects a scenario where earnings shortfalls or multiple compression combine to materially reduce the stock from its current level.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Warner Music Group Corp.
WMG · NASDAQCommunication ServicesEntertainmentSeptember year-end
Warner Music Group is one of the world's three major music companies that discovers, develops, and markets recording artists and their music. It generates revenue primarily from recorded music sales and streaming (about 85% of revenue) and music publishing royalties (about 15%), with income coming from physical sales, digital downloads, streaming platforms, and licensing music for films, TV, and advertising. Its competitive advantage lies in owning a massive, valuable catalog of iconic recordings and publishing rights—including works from artists like Madonna, Bruno Mars, and Ed Sheeran—which provides stable, recurring revenue and significant negotiating power with digital platforms.
Market Cap
$15.9B
Revenue TTM
$6.9B
Net Income TTM
$305M
Net Margin
4.4%
WMG 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
33%Exceptional
12 quarters tracked
Revenue Beat Rate
75%Exceptional
vs consensus estimates
Avg EPS Surprise
-26.2%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q2 2025
Q3 2025
Q4 2025
Q1 2026
Last 4 Quarters
EPS beats: 0 of 4Q2 2025
EPS
$0.07/$0.28
Revenue
$1.5B/$1.5B
Q3 2025
EPS
$-0.03/$0.29
Revenue
$1.7B/$1.6B
Q4 2025
EPS
$0.21/$0.35
Revenue
$1.9B/$1.8B
Q1 2026
EPS
$0.33/$0.40
Revenue
$1.8B/$1.8B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q2 2025 | $0.07/$0.28 | -75.2% | $1.5B/$1.5B | -2.2% |
| Q3 2025 | $-0.03/$0.29 | -110.3% | $1.7B/$1.6B | +6.0% |
| Q4 2025 | $0.21/$0.35 | -40.0% | $1.9B/$1.8B | +5.4% |
| Q1 2026 | $0.33/$0.40 | -17.5% | $1.8B/$1.8B | +3.8% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$7.2B
+4.7% YoY
FY2
$7.6B
+5.4% YoY
EPS Outlook
FY1
$0.86
+46.1% YoY
FY2
$0.98
+13.7% YoY
Trailing FCF (TTM)$522M
FCF Margin: 7.6%
Next Earnings
May 7, 2026
Expected EPS
$0.29
Expected Revenue
$1.6B
WMG beat EPS estimates in 0 of 4 tracked quarters. Mixed delivery makes the upcoming report a key data point for re-rating.
WMG 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 $6.7B
Product Mix
Latest annual revenue by segment or product family
Recorded Music
80.5%
+3.5% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
UNITED STATES
42.9%
+0.1% YoY
Tap, hover, or focus a slice to inspect segment detail.
Recorded Music is the largest disclosed segment at 80.5% of FY 2025 revenue, up 3.5% YoY.
UNITED STATES is the largest reported region at 42.9%, up 0.1% YoY.
WMG Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Significantly Undervalued
Fair value est. $65 — implies +131.4% from today's price.
Upside to Fair Value
131.4%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
WMG
43.4x
vs
S&P 500
25.2x
+72% premium
vs Communication Services Trailing P/E
WMG
43.4x
vs
Communication Services
15.5x
+179% premium
vs WMG 5Y Avg P/E
Today
43.4x
vs
5Y Average
44.0x
In line with benchmark
Forward PE
22.9x
S&P 500
19.1x
+20%
Communication Services
13.1x
+76%
5Y Avg
—
—
Trailing PE
43.4x
S&P 500
25.2x
+72%
Communication Services
15.5x
+179%
5Y Avg
44.0x
-1%
PEG Ratio
—
S&P 500
1.75x
—
Communication Services
0.66x
—
5Y Avg
—
—
EV/EBITDA
17.2x
S&P 500
15.3x
+13%
Communication Services
8.7x
+98%
5Y Avg
19.2x
-10%
Price/FCF
29.4x
S&P 500
21.3x
+38%
Communication Services
11.6x
+154%
5Y Avg
30.9x
-5%
Price/Sales
2.4x
S&P 500
3.1x
-25%
Communication Services
1.0x
+125%
5Y Avg
2.8x
-16%
Dividend Yield
2.43%
S&P 500
1.88%
+29%
Communication Services
3.38%
-28%
5Y Avg
2.07%
+18%
| Metric | WMG | S&P 500 | Communication Services | 5Y Avg WMG |
|---|---|---|---|---|
| Forward PE | 22.9x | 19.1x+20% | 13.1x+76% | — |
| Trailing PE | 43.4x | 25.2x+72% | 15.5x+179% | 44.0x |
| PEG Ratio | — | 1.75x | 0.66x | — |
| EV/EBITDA | 17.2x | 15.3x+13% | 8.7x+98% | 19.2x-10% |
| Price/FCF | 29.4x | 21.3x+38% | 11.6x+154% | 30.9x |
| Price/Sales | 2.4x | 3.1x-25% | 1.0x+125% | 2.8x-16% |
| Dividend Yield | 2.43% | 1.88% | 3.38% | 2.07% |
WMG trades above S&P 500 benchmarks on 4 of 5 measured multiples — commands a broad premium across most valuation dimensions.
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 toolWMG Financial Health
Verdict
Strong
WMG 11.4% ROIC signals a durable competitive advantage — returns 2.5% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$6.9B
Revenue Growth
TTM vs prior year
+8.5%
Gross Margin
Gross profit as a share of revenue
44.4%
Operating Margin
Operating income divided by revenue
11.7%
Net Margin
Net income divided by revenue
4.4%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$0.59
Free Cash Flow (TTM)
Cash generation after capex
$522M
FCF Margin
FCF as share of revenue — the primary cash quality signal
7.6%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
11.4%
ROA
Return on assets, trailing twelve months
3.1%
Cash & Equivalents
Liquid assets on the balance sheet
$532M
Net Debt
Total debt minus cash
$4.1B
Debt Serviceability
Net debt as a multiple of annual free cash flow
7.8× FCF
~7.8 years to full repayment at current FCF run-rate
ROE *
Return on equity, trailing twelve months
38.3%
* Elevated by buyback-compressed equity — compare ROIC (11.4%) for an undistorted picture of capital efficiency.
Shareholder Returns
How capital is returned to owners
Total shareholder yield
2.5%
Dividend
2.4%
Buyback
0.1%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$16M
Dividend / Share
Annualized trailing dividend per share
$0.74
Payout Ratio
Share of earnings distributed as dividends
104.9%
Shares Outstanding
Declining as buybacks retire shares
522M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt). ROE marked * where buyback-compressed equity base may inflate the figure.
Open full ratios pageWMG Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 29, 2026
High Risk
Financial and Corporate Risks
Warner Music Group (WMG) carries a substantial debt burden, with $4.4 billion in long-term debt and total liabilities of $9.2 billion. This high level of debt could significantly limit the company's ability to return capital to shareholders, as a large portion of future profits may be allocated to servicing this debt.
High Risk
Legal and Regulatory Risks
Emerging music regulations in Europe pose a significant risk to WMG's business model and financial health. Advocacy from artists and songwriter groups for stricter regulations on music streaming could impact existing contracts and revenue streams, particularly since a large portion of WMG's revenue is subject to regulated rates.
High Risk
Concentration of Ownership and Control
WMG is predominantly controlled by Access Industries, which holds a significant majority of voting rights and economic interest. This concentration of control raises concerns that Access's interests may not align with those of minority shareholders, potentially obstructing favorable mergers or transactions.
Medium
Revenue Growth Concerns
WMG's revenue growth has been sluggish over the past five years, underperforming relative to benchmarks in the consumer discretionary sector. The projected revenue growth for the next 12 months is also considered underwhelming, indicating challenges in introducing new products and services that can enhance top-line performance.
Medium
Profitability and Earnings
While adjusted earnings may appear favorable, GAAP earnings for WMG have shown stagnation. A significant portion of reported earnings is attributed to adjustments for depreciation and amortization, raising concerns about the company's true profitability when accounting for these real expenses.
Medium
Market and Industry Risks
WMG faces multiple market risks, including digital piracy, economic fluctuations, and shifting consumer behavior. The rise of AI-generated content and slowing growth in streaming services further complicate the landscape, potentially impacting revenue and market share.
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 WMG Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 29, 2026
Strong Revenue Growth
WMG has reported a year-over-year revenue increase of over 10%, indicating robust business operations. This growth reflects the company's ability to capitalize on market opportunities and consumer demand.
High Return on Equity
The company boasts a strong return on equity of 38.33%, suggesting effective management and profitability relative to shareholder equity. This high ROE indicates that WMG is generating substantial profits from its equity base.
Positive Analyst Sentiment
A significant majority of Wall Street analysts have a 'Buy' or 'Moderate Buy' rating on WMG stock. This positive sentiment is further supported by an average 12-month price target suggesting a potential upside of 20-28% from current levels.
Streaming and AI Revenue Potential
WMG is well-positioned for long-term success due to potential revenue sharing from AI-driven product releases and expansions. New royalty agreements and consumer price increases are expected to further enhance revenue streams.
Attractive Value Opportunity
The current stock price is near its 52-week low, which could present a buying opportunity for value-oriented investors. This positioning may attract investors looking for stocks with potential for recovery and growth.
Dividend Income
WMG offers a dividend yield of approximately 2.6%, providing income to investors. While the current payout ratio is high, future earnings estimates suggest improved sustainability of the dividend.
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.
WMG 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
$30.35
52W Range Position
62%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$23.34
+30.0% from the low
52-Week High
$34.63
-12.4% from the high
1 Month
+16.69%
3 Month
+4.47%
YTD
-0.3%
1 Year
-0.8%
3Y CAGR
+2.1%
5Y CAGR
-3.1%
10Y CAGR
+0.1%
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.
WMG vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
22.9x
vs 33.8x median
-32% below peer median
Revenue Growth
+4.7%
vs +12.6% median
-62% below peer median
Net Margin
4.4%
vs 9.2% median
-52% below peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
WMG WMG Warner Music Group Corp. | $15.9B | 22.9x | +4.7% | 4.4% | Buy | +17.0% |
SON SONY Sony Group Corporation | $123.6B | 0.1x | +3.5% | 9.2% | Buy | +44.7% |
LYV LYV Live Nation Entertainment, Inc. | $39.0B | 116.8x | +16.5% | 0.3% | Buy | +7.9% |
MMY MMYT MakeMyTrip Limited | $4.4B | 71.7x | +26.3% | 5.5% | Buy | +83.9% |
SPO SPOT Spotify Technology S.A. | $87.5B | 32.8x | +12.6% | 15.5% | Buy | +48.3% |
AAP AAPL Apple Inc. | $4.22T | 33.8x | +4.0% | 27.2% | Buy | +10.3% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
WMG Dividend and Capital Return
WMG returns 2.5% total yield, led by a 2.43% dividend, raised 5 consecutive years.
Dividend SustainableFCF Adequate
Total Shareholder Yield
2.5%
Dividend + buyback return per year
Buyback Yield
0.1%
Dividend Yield
2.43%
Payout Ratio
1.0%
How WMG Splits Its Return
Div 2.43%
Dividend 2.43%Buybacks 0.1%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$0.74
Growth Streak
Consecutive years of dividend increases
5Y
3Y Div CAGR
6.1%
5Y Div CAGR
25.3%
Ex-Dividend Date
—
Payment Cadence
Quarterly
4 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
$16M
Estimated Shares Retired
527.2K
Approx. Share Reduction
0.1%
Shares Outstanding
Current diluted share count from the screening snapshot
522M
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $0.19 | — | — | — |
| 2025 | $0.74 | +5.7% | 0.1% | 2.3% |
| 2024 | $0.70 | +6.1% | 0.0% | 2.3% |
| 2023 | $0.66 | +6.5% | 0.0% | 2.1% |
| 2022 | $0.62 | +14.8% | 0.0% | 2.7% |
FAQ
7 questionsWMG Investor Questions
Common questions answered from live analyst data and company financials.
01Is Warner Music Group Corp. (WMG) stock a buy or sell in 2026?
Warner Music Group Corp. (WMG) is rated Buy by Wall Street analysts as of 2026. Of 24 analysts covering the stock, 16 rate it Buy or Strong Buy, 7 rate it Hold, and 1 rate it Sell or Strong Sell. The consensus 12-month price target is $36, implying +17.0% from the current price of $30.
02What is the WMG stock price target for 2026?
The Wall Street consensus price target for WMG is $36 based on 24 analyst estimates. The high-end target is $38 (+25.2% from today), and the low-end target is $33 (+8.7%). The base case model target is $42.
03Is Warner Music Group Corp. (WMG) stock overvalued in 2026?
WMG trades at 22.9x times forward earnings. The stock trades at a notable premium to the broad market, which is typical for businesses with strong free cash flow and above-average growth expectations. Based on current multiples versus the peer group, the relative model signals significantly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Warner Music Group Corp. (WMG) stock in 2026?
The primary risks for WMG in 2026 are: (1) Financial and Corporate Risks — Warner Music Group (WMG) carries a substantial debt burden, with $4. (2) Legal and Regulatory Risks — Emerging music regulations in Europe pose a significant risk to WMG's business model and financial health. (3) Concentration of Ownership and Control — WMG is predominantly controlled by Access Industries, which holds a significant majority of voting rights and economic interest. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Warner Music Group Corp.'s revenue and earnings forecast?
Analyst consensus estimates WMG will report consensus revenue of $7.2B (+4.7% year-over-year) and EPS of $0.86 (+46.1% year-over-year) for the upcoming fiscal year. The following year, analysts project $7.6B in revenue.
06When does Warner Music Group Corp. (WMG) report its next earnings?
Warner Music Group Corp. is expected to report its next earnings on approximately 2026-05-07. Consensus expects EPS of $0.29 and revenue of $1.6B. Over recent quarters, WMG has beaten EPS estimates 33% of the time.
07How much free cash flow does Warner Music Group Corp. generate?
Warner Music Group Corp. (WMG) generated $522M in free cash flow over the trailing twelve months — a free cash flow margin of 7.6%. WMG returns capital to shareholders through dividends (2.4% yield) and share repurchases ($16M TTM).