MODEL VERDICT
Warner Music Group Corp. (WMG)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | MODERATE | 0.68 | $27.98 | CURRENT | — |
| Apr 24, 2026 | MODERATE | 0.68 | $28.94 | CURRENT | — |
| Apr 17, 2026 | MODERATE | 0.68 | $30.25 | CURRENT | — |
| Apr 16, 2026 | MODERATE | 0.68 | $29.05 | CURRENT | — |
| Apr 10, 2026 | MODERATE | 0.68 | $28.50 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 7 analyst estimates | $45.05 | +61.0% | 20% | A- | Analyst Est. |
| EV/EBITDA 8 industry peers | $45.13 | +61.3% | 20% | A- | Peer Data |
| Industry Median P/E 6 industry peers | $23.42 | -16.3% | 15% | A | Peer Data |
| Price / Free Cash Flow 7 industry peers | $38.53 | +37.7% | 15% | B+ | Peer Data |
| EV/EBIT 7 industry peers | $33.08 | +18.2% | 8% | B+ | Peer Data |
| EV/FCF 6 industry peers | $26.55 | -5.1% | 7% | B | Model Driven |
| EV To Revenue 8 industry peers | $42.46 | +51.8% | 4% | B | Data |
| Price / Sales 8 industry peers | $49.69 | +77.6% | 3% | B | Model Driven |
| Earnings Yield 6 industry peers | $21.86 | -21.9% | 2% | B | Data |
| FCF Yield 8 industry peers | $35.18 | +25.7% | 1% | B | Data |
| Weighted Output Blended model output | $64.74 | +131.4% | 100% | 78 | SIGNIFICANTLY UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 34× | 37× | 40× (Current) | 43× | 46× |
|---|---|---|---|---|---|
| Bear Case (4%) | $25 | $27 | $29 | $31 | $33 |
| Conservative (7%) | $25 | $28 | $30 | $32 | $34 |
| Base Case (10.0%) | $26 | $28 | $31 | $33 | $35 |
| Bull Case (14%) | $27 | $29 | $32 | $34 | $37 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 46.37 | 43.65 | 33.04 | 74.45 | 16.35 |
| EV/EBIT | 30.95 | 29.44 | 25.01 | 43.86 | 7.60 |
| EV/EBITDA | 133.01 | 20.11 | 17.07 | 695.78 | 275.73 |
| P/FCF | 90.60 | 42.57 | 25.15 | 346.43 | 125.85 |
| P/FFO | 24.27 | 21.05 | 19.25 | 36.35 | 7.00 |
| P/AFFO | 150.17 | 34.95 | 32.28 | 615.88 | 260.35 |
| P/B Ratio | 135.61 | 42.92 | 21.03 | 482.00 | 196.82 |
| Div Yield | 0.02 | 0.02 | 0.01 | 0.02 | 0.00 |
| P/S Ratio | 3.25 | 3.07 | 2.37 | 4.34 | 0.83 |
Based on our peer multiples analysis with 26 valuation metrics, the model estimates WMG's fair value at $64.74 vs the current price of $27.98, implying +131.4% upside potential. Model verdict: Significantly Undervalued. Confidence: 78/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $64.74 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $33.93 (P10) to $152.32 (P90), with a median of $68.95.
WMG's current P/E of 40.0x compares to the industry median of 33.5x (6 peers in the group). This represents a +19.5% premium to the industry. The historical average P/E is 46.4x over 5 years. Signal: Slight Premium.
24 analysts cover WMG with a consensus rating of Buy. The consensus price target is $35.50 (range: $33.00 — $38.00), implying +26.9% upside from the current price. Grade breakdown: Strong Buy (0), Buy (16), Hold (7), Sell (1), Strong Sell (0).
The model confidence score is 78/100, based on: data completeness (27), peer quality (25), historical depth (16), earnings stability (8), and model agreement (2). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that WMG's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +0.0σ, meaning margins are 0.0 standard deviations above their historical average. If margins revert to the 5-year mean (4.2%), the model estimates fair value drops by 910.0% to approximately $31. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.