TME Should I Buy
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Tencent Music Entertainment Group is not a good buy at the moment for a beginner investor with a long-term strategy. The stock is facing significant competitive pressures, negative sentiment from analysts, and lacks strong trading signals or positive catalysts to support a buy decision. The current technical indicators and options data do not suggest a favorable entry point, and the company's financial performance, while growing, is overshadowed by uncertainties in its competitive landscape.
The stock is in a bearish trend with moving averages indicating downward momentum (SMA_200 > SMA_20 > SMA_5). The MACD histogram is negative (-0.289), though contracting, and the RSI is at 16.293, indicating the stock is oversold. Key support is at 9.622, with resistance levels at 11.953 and above. The stock is trading near its support level but lacks signs of reversal.
The company reported a 15.9% YoY revenue growth and a 12.57% increase in net income for Q4 2025, showing solid financial performance.
The company faces significant competitive pressure from emerging platforms like Soda Music and AI-generated content, which are impacting its ability to grow subscribers and ARPPU. Analysts have downgraded the stock, citing uncertainties in its growth outlook and strategic execution. Additionally, the company has stopped disclosing key operational metrics, raising transparency concerns.
In Q4 2025, Tencent Music reported revenue of $1.24 billion, up 15.9% YoY, with net income increasing by 12.57% YoY to $2.2 billion. EPS rose by 12.7% YoY to $0.71, and gross margin improved to 44.69%. While these figures indicate growth, they are overshadowed by competitive and strategic challenges.
Analyst sentiment is predominantly negative. Several firms, including Morgan Stanley, UBS, and JPMorgan, have downgraded the stock, citing competitive risks, AI disruption, and uncertainties in the company's strategic execution. Price targets have been significantly reduced, with most analysts projecting a range between $12 and $14, which is not far from the current price.
