Stock Price & Analysis

Based on the latest market data and news, here's a comprehensive analysis of TME stock:

Recent Price Movement

The stock is currently trading at $13.015 during regular market hours, showing a significant decline of -9.49% today. The stock opened at $13.83 and has traded between $12.92 and $13.83.

Fundamental Analysis

Key valuation metrics show:

• P/E Ratio: 25.12x
• EV/EBITDA: 17.93x
• P/S Ratio: 3.26x
• P/B Ratio: 2.04x

Business Segments

Revenue breakdown for FY2022:

• Social entertainment services: 55.95% (¥15.86B)
• Online music services: 44.05% (¥12.48B)

Recent Performance & News

TME has shown strong momentum recently, with the stock gaining 12.70% last week amid optimism from President Xi's support and DeepSeek AI boost. The stock rose 5.3% in another recent trading session.

Analyst Ratings

Recent analyst actions have been generally positive, with multiple upgrades:

• Morgan Stanley upgraded to Buy with PT $8.5
• JP Morgan upgraded to Buy with PT $7.7
• Benchmark upgraded to Strong Buy with PT $7

Recommendation

SELL for the following reasons:

1. The stock is showing significant weakness today (-9.49%)
2. Current price levels are well above recent analyst price targets
3. Valuation multiples appear stretched compared to historical levels
4. The sharp recent rally may have created overbought conditions

Based on the provided data and recent market movements, here's a price prediction analysis for TME stock in 2025:

TME stock is projected to reach $16.50 by end of 2025, driven by strong growth in online music services segment and positive AI sentiment in Chinese tech stocks. The stock has shown robust technical momentum with a 12.70% gain last week, and current Fibonacci resistance levels suggest room for upward movement with R1 at $14.27 and R2 at $14.91.

The S1 support level for TME Stock is $12.62 ,The R1 resistant level for TME Stock is $14.29.

As of the end of day on 2025-02-27, the price of TME Stock was $12.7.

The target price for TME Stock according to analyst rating is 14.00, with the highest price target at 16.00 and the lowest at 13.00. Analysts have a Strong Buy rating on TME Stock overall.

The market cap of TME is $65.6B.

Based on the comprehensive data analysis and recent market movements, TME appears to be overvalued at current levels for several key reasons:

Technical Analysis

The stock has shown significant momentum recently, rising over 12% last week, but is now experiencing a sharp pullback in today's trading (-9.49% in regular market). The current price movement suggests potential profit-taking and overbought conditions.

Fundamental Valuation

The stock is trading at 14.6x 2025E consensus earnings, which while in line with domestic peer NetEase Cloud, represents a rich valuation given:

1. Structural decline in social entertainment segment with paying users halving over past four years
2. Diverging business fundamentals between growing online music but declining social entertainment
3. DCF analysis suggests fair value of $9.50, implying 15% downside from current levels

Key Concerns

• Social entertainment business faces:

  • Ongoing user churn
  • Growing competition from short-form video platforms
  • Lack of product innovation
  • Declining paying user base

• While online music shows strength with:

  • 20% YoY revenue growth
  • 15% increase in paying users
  • 4% ARPU growth to RMB 10.8

However, the strength in online music is not enough to justify current valuation levels given the structural challenges in social entertainment segment which historically has been a key profit driver.

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.

Based on the provided data and market analysis, here's a projection for TME stock price in 2030:

Tencent Music Entertainment (TME) stock is projected to reach $28-32 by 2030, driven by its successful transition from social entertainment to online music services. The company's revenue mix has shifted significantly, with online music services growing from 32% in 2020 to 62.4% in 2023, demonstrating strong execution in its core business transformation.

The company's improving profitability metrics, with net margin expanding from 14.32% in 2020 to 18.81% in 2023, coupled with consistent growth in EPS from 1.24 to 1.55, suggests sustainable long-term value creation that supports this price target.

TME has a total of 5185 employees.