TME Should I Buy
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Tencent Music Entertainment Group (TME) is not a strong buy at this moment for a beginner investor with a long-term strategy. The pre-market price is slightly down, and while the company has shown solid financial growth in Q4 2025, the competitive landscape and analyst downgrades signal significant risks. The lack of strong proprietary trading signals and the absence of positive catalysts further support a hold recommendation.
The MACD is positive and expanding, indicating bullish momentum. RSI is neutral at 74.176, and moving averages are converging, suggesting no clear trend. The stock is trading near its R1 resistance level of 10.016, with key support at 8.931. However, the stock's short-term trend indicates a high probability of decline in the next week (-7.28%) and month (-10.48%).
The company reported strong financial performance in Q4 2025, with revenue up 15.86% YoY, net income up 12.57% YoY, and EPS up 12.70% YoY. Gross margin also improved by 2.45%.
Analysts have downgraded the stock significantly, citing rising competition from Soda Music and AI disruption risks. The company's moat and ability to grow subscribers are under question. Near-term earnings visibility is low, and the stock's short-term trend suggests a decline. No significant hedge fund or insider trading activity is observed, and there are no recent Congress trading data or influential figure transactions.
In Q4 2025, Tencent Music showed strong YoY growth with revenue at $8.64 billion (+15.86%), net income at $2.20 billion (+12.57%), and EPS at 0.71 (+12.70%). Gross margin improved to 44.69% (+2.45%).
Analyst sentiment is predominantly negative. Multiple firms, including Morgan Stanley, UBS, and JPMorgan, downgraded the stock, citing increased competition, AI disruption risks, and uncertain near-term growth. Price targets have been significantly lowered, with the majority now in the $12-$14 range, down from previous highs of $20-$28.
