Stock Price & Analysis

Buy TME stock as it shows strong earnings growth and positive momentum. Hold TME stock as it demonstrates solid fundamentals and favorable technical indicators.

TME stock is predicted to reach $16 by the end of 2025, driven by strong subscription growth and AI-driven improvements. The stock's recent earnings surprise and positive momentum support this target.

The S1 support level for TME Stock is $14.01 ,The R1 resistant level for TME Stock is $14.87.

As of the end of day on 2025-04-02, the price of TME Stock was $14.03.

The target price for TME Stock according to analyst rating is 16.44, with the highest price target at 19.00 and the lowest at 13.00. Analysts have a Strong Buy rating on TME Stock overall.

The market cap of TME is $74.5B.

Analysis and Insights

Valuation Metrics:

TME's current valuation metrics suggest a premium relative to industry peers. The stock trades at a P/E ratio of 24.55, EV/EBITDA of 28.74, and PS ratio of 22.14, all of which are above historical averages, indicating potential overvaluation.

Financial Performance:

TME reported strong Q4 results with an 8% revenue increase to 7.46 billion yuan, driven by a 25.5% rise in online subscription revenues. However, the karaoke segment declined 36.1%, highlighting shifting consumer preferences and operational challenges.

Analyst Sentiment:

Analysts have a Strong Buy consensus on TME, with recent price target increases from Bernstein and Morgan Stanley. However, the average price target implies a 6% downside, suggesting limited upside potential.

Market Trends:

TME's stock rose 15% post-earnings but faces headwinds from declining karaoke revenues and high valuation multiples. While AI-driven subscription growth is promising, the stock may be overvalued given current fundamentals.

Conclusion:

TME appears overvalued due to high valuation multiples and mixed segment performance. While strong subscription growth is positive, the stock's current price reflects recent earnings optimism, leaving limited upside without further catalysts.

Tencent Music Entertainment Group is a holding company mainly engaged in the provision and operation of online music entertainment platform. The Company is mainly engaged in the provision of online music services, social entertainment services and other services. The Company operates four major product brands, QQ Music, Kugou Music, Kuwo Music and WeSing, through which the Company provides online music and social entertainment services to address the music entertainment needs of audience in China. The Company also offers Lazy Audio, the dedicated long-form audio app as a complement to the flagship music-centric product portfolio. The Company is also engaged in the sales of music-related merchandise, the provision of services to smart device and car manufacturers and ticketing services for online music events. The Company mainly conducts its businesses in domestic and overseas markets.

TME stock is predicted to reach $25 by 2030, driven by strong earnings growth and a shift toward online subscription services. The company's 50% increase in net profits and 8% revenue growth, along with AI-driven user engagement improvements, support this bullish outlook.

TME has a total of 5185 employees.