Upside case
Bull case
$60+114.6%
WMG would need investors to value it at roughly 43x earnings — about 23x more generous than today's 20x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated Jun 18, 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
$40
+40.6% vs today
Scenario Range
$29 – $60
Model bear to bull value window
Coverage
24
Published analyst ratings
Valuation Context
19.9x
Forward P/E · Market cap $14.7B
WMG price targets
Three scenarios for where WMG stock could go
Current
~$28
Confidence
41 / 100
Updated
Jun 18, 2026
Where we are now
Current · $28
Bear
$29
Base
$46
Bull
$60
Market caseClosest to today
Base case
$46+62.8%
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
$29+2.6%
The bear case assumes sentiment or fundamentals disappoint enough to push WMG down roughly 3% 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.
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
$14.7B
Revenue TTM
$7.1B
Net Income TTM
$452M
Net Margin
6.3%
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
42%Exceptional
12 quarters tracked
Revenue Beat Rate
75%Exceptional
vs consensus estimates
Avg EPS Surprise
-18.1%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 1 of 4Q3 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
Q2 2026
EPS
$0.35/$0.27
Revenue
$1.7B/$1.6B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| 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% |
| Q2 2026 | $0.35/$0.27 | +31.0% | $1.7B/$1.6B | +7.4% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$7.4B
+3.7% YoY
FY2
$7.7B
+3.9% YoY
EPS Outlook
FY1
$1.02
+17.1% YoY
FY2
$1.13
+10.6% YoY
Trailing FCF (TTM)$675M
FCF Margin: 9.5%
Next Earnings
August 6, 2026
Expected EPS
$0.38
Expected Revenue
$1.8B
WMG beat EPS estimates in 1 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
Cheap versus peers
Fair value est. $36 — implies +28.2% from today's price.
Upside to Fair Value
28.2%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
WMG
40.2x
vs
S&P 500
24.4x
+65% premium
vs Communication Services Trailing P/E
WMG
40.2x
vs
Communication Services
15.3x
+163% premium
vs WMG 5Y Avg P/E
Today
40.2x
vs
5Y Average
44.0x
8% discount
Forward PE
19.9x
S&P 500
18.8x
+6%
Communication Services
11.3x
+75%
5Y Avg
—
—
Trailing PE
40.2x
S&P 500
24.4x
+65%
Communication Services
15.3x
+163%
5Y Avg
44.0x
-8%
PEG Ratio
—
S&P 500
1.66x
—
Communication Services
0.64x
—
5Y Avg
—
—
EV/EBITDA
16.2x
S&P 500
15.2x
+7%
Communication Services
9.6x
+69%
5Y Avg
19.2x
-15%
Price/FCF
27.3x
S&P 500
20.7x
+32%
Communication Services
11.4x
+139%
5Y Avg
30.9x
-12%
Price/Sales
2.2x
S&P 500
3.1x
-29%
Communication Services
1.0x
+115%
5Y Avg
2.8x
-22%
Dividend Yield
2.62%
S&P 500
1.91%
+37%
Communication Services
3.43%
-24%
5Y Avg
2.07%
+27%
| Metric | WMG | S&P 500 | Communication Services | 5Y Avg WMG |
|---|---|---|---|---|
| Forward PE | 19.9x | 18.8x | 11.3x+75% | — |
| Trailing PE | 40.2x | 24.4x+65% | 15.3x+163% | 44.0x |
| PEG Ratio | — | 1.66x | 0.64x | — |
| EV/EBITDA | 16.2x | 15.2x | 9.6x+69% | 19.2x-15% |
| Price/FCF | 27.3x | 20.7x+32% | 11.4x+139% | 30.9x-12% |
| Price/Sales | 2.2x | 3.1x-29% | 1.0x+115% | 2.8x-22% |
| Dividend Yield | 2.62% | 1.91% | 3.43% | 2.07% |
WMG trades above S&P 500 benchmarks on 2 of 5 measured multiples — is elevated on some multiples, but competitive on others — a mixed valuation picture.
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 generates $675M in free cash flow at a 9.5% margin — 11.4% ROIC signals a durable competitive advantage · returns 2.7% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$7.1B
Revenue Growth
TTM vs prior year
+12.6%
Gross Margin
Gross profit as a share of revenue
45.8%
Operating Margin
Operating income divided by revenue
12.8%
Net Margin
Net income divided by revenue
6.3%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$0.87
Free Cash Flow (TTM)
Cash generation after capex
$675M
FCF Margin
FCF as share of revenue — the primary cash quality signal
9.5%
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
4.5%
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
6.0× FCF
~6.0 years to full repayment at current FCF run-rate
ROE *
Return on equity, trailing twelve months
53.6%
* 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
2.7%
Dividend
2.6%
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 June 18, 2026
High Risk
High Debt Burden
Warner Music Group faces significant financial risk due to its high debt levels, which could strain cash flow and limit financial flexibility.
High Risk
Competitive Pressures
The company operates in a highly competitive industry with larger rivals, posing challenges to market share and profitability.
Medium
Slowing Streaming Growth
Structural headwinds from decelerating streaming growth could hinder revenue expansion and long-term growth prospects.
Medium
Weak Cash Flow
Weak cash flow generation may limit the company's ability to invest in growth opportunities or service its debt.
Lower
Cultural Relevance Decline
The declining cultural relevance of new music could impact demand for Warner Music Group's content and artist roster.
Lower
Mixed Fundamentals
While the company shows strong revenue growth and profitability metrics, its overall fundamentals present a mixed investment case.
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 June 18, 2026
Strategic partnerships and cost discipline
Warner Music Group is leveraging strategic partnerships and maintaining cost discipline to capitalize on high-margin opportunities, positioning itself for outsized returns by 2026.
Strong Q2 financial performance
The company reported higher Q2 sales and net income compared to the previous year, alongside margin expansion, indicating robust financial health.
Streaming growth above consensus
The bull case assumes continued high CAGR in streaming revenue, exceeding current consensus estimates, which could drive significant upside.
Margin expansion opportunities
Higher-value licensing and successful international partnerships are expected to accelerate margin expansion, pushing consensus targets toward the analyst high of ~$46 within 12 months.
Revenue growth trajectory
Warner Music Group demonstrates consistent revenue growth, supported by its evolving business model and market positioning.
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
$28.17
52W Range Position
41%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$23.34
+20.7% from the low
52-Week High
$35.24
-20.1% from the high
1 Month
-18.49%
3 Month
+14.51%
YTD
-7.5%
1 Year
+6.9%
3Y CAGR
+2.0%
5Y CAGR
-4.1%
10Y CAGR
-0.7%
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
19.9x
vs 35.3x median
-44% below peer median
Revenue Growth
+3.7%
vs +10.1% median
-63% below peer median
Net Margin
6.3%
vs 5.0% median
+28% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
WMG WMG Warner Music Group Corp. | $14.7B | 19.9x | +3.7% | 6.3% | Buy | +40.6% |
SON SONY Sony Group Corporation | $120.1B | 0.1x | +3.8% | -2.7% | Buy | +47.6% |
LYV LYV Live Nation Entertainment, Inc. | $39.8B | — | +10.1% | 0.3% | Buy | +8.5% |
MMY MMYT MakeMyTrip Limited | $4.4B | 107.0x | +11.3% | 5.0% | Buy | +94.8% |
SPO SPOT Spotify Technology S.A. | $96.3B | 36.6x | +12.3% | 15.5% | Buy | +31.3% |
AAP AAPL Apple Inc. | $4.38T | 34.0x | +6.8% | 27.2% | Buy | +9.6% |
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 2.7% total yield, led by a 2.62% dividend, raised 6 consecutive years.
Dividend SustainableFCF Adequate
Total Shareholder Yield
2.7%
Dividend + buyback return per year
Buyback Yield
0.1%
Dividend Yield
2.62%
Payout Ratio
1.0%
How WMG Splits Its Return
Div 2.62%
Dividend 2.62%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
6Y
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
568.0K
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 | $0.38 | — | — | — |
| 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 $40, implying +40.6% from the current price of $28. The bear case scenario is $29 and the bull case is $60.
02What is the WMG stock price target for 2026?
The Wall Street consensus price target for WMG is $40 based on 24 analyst estimates. The high-end target is $43 (+52.6% from today), and the low-end target is $36 (+27.8%). The base case model target is $46.
03Is Warner Music Group Corp. (WMG) stock overvalued in 2026?
WMG trades at 19.9x 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 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 Warner Music Group Corp. (WMG) stock in 2026?
The primary risks for WMG in 2026 are: (1) High Debt Burden — Warner Music Group faces significant financial risk due to its high debt levels, which could strain cash flow and limit financial flexibility. (2) Competitive Pressures — The company operates in a highly competitive industry with larger rivals, posing challenges to market share and profitability. (3) Slowing Streaming Growth — Structural headwinds from decelerating streaming growth could hinder revenue expansion and long-term growth prospects. 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 $7.4B (+3.7% year-over-year) and EPS of $1.02 (+17.1% year-over-year) for the upcoming fiscal year. The following year, analysts project $7.7B 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 2026-08-06. Consensus expects EPS of $0.38 and revenue of $1.8B. Over recent quarters, WMG has beaten EPS estimates 42% of the time.
07How much free cash flow does Warner Music Group Corp. generate?
Warner Music Group Corp. (WMG) generated $675M in free cash flow over the trailing twelve months — a free cash flow margin of 9.5%. WMG returns capital to shareholders through dividends (2.6% yield) and share repurchases ($16M TTM).