TME Should I Buy
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Tencent Music Entertainment Group (TME) is not a strong buy at the moment for a beginner investor with a long-term strategy. While the company has shown strong financial growth in its latest quarter, the technical indicators are bearish, and there is no strong trading signal from Intellectia Proprietary Trading Signals. Additionally, mixed analyst ratings and the lack of significant positive catalysts make it prudent to hold off on investing right now.
The technical indicators are bearish. The MACD is below 0 and negatively contracting, RSI is neutral at 21.923, and the moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading near its support level of 13.591, with resistance at 14.373.
The company's financials for Q3 2025 show strong growth: revenue increased 20.64% YoY, net income rose 36.01% YoY, and EPS grew 38.00% YoY. Gross margin also improved to 43.51%.
Emerging competitive pressure from Soda Music is likely to persist, potentially impacting ARPPU and user acquisition. Analysts have downgraded the stock recently, citing blurred near-term earnings visibility and competitive threats.
In Q3 2025, Tencent Music reported revenue of $8.46 billion, up 20.64% YoY. Net income increased to $2.15 billion, up 36.01% YoY. EPS rose to 0.69, up 38.00% YoY. Gross margin improved to 43.51%, up 2.04% YoY.
Analyst ratings are mixed. 86 Research recently upgraded the stock to Buy with a $17.40 price target, citing secure monetization and an overdone selloff. However, Macquarie downgraded the stock to Neutral with a $14.10 price target, citing competitive threats and blurred earnings visibility. Morgan Stanley maintains an Overweight rating but lowered its price target to $25 from $27.50.
