WMG Valuation

Warner Music Group Corp

Add to Watchlist

Advanced Chart

30.230

+0.48(1.613%)1D

WMG Relative Valuation

WMG's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, WMG is overvalued; if below, it's undervalued.

Historical Valuation

Warner Music Group Corp (WMG) is now in the Fair zone, suggesting that its current forward PE ratio of 20.46 is considered Fairly compared with the five-year average of 29.60. The fair price of Warner Music Group Corp (WMG) is between 28.97 to 49.29 according to relative valuation methord.

Relative Value

Fair Zone

28.97-49.29

Current Price：30.23

Fair

20.65

Trailing

Forward

13.10

EV/EBITDA

Warner Music Group Corp. (WMG) has a current EV/EBITDA of 13.10. The 5-year average EV/EBITDA is 16.21. The thresholds are as follows: Strongly Undervalued below 9.50, Undervalued between 9.50 and 12.85, Fairly Valued between 19.57 and 12.85, Overvalued between 19.57 and 22.93, and Strongly Overvalued above 22.93. The current Forward EV/EBITDA of 13.10 falls within the Historic Trend Line -Fairly Valued range.

17.60

EV/EBIT

Warner Music Group Corp. (WMG) has a current EV/EBIT of 17.60. The 5-year average EV/EBIT is 23.23. The thresholds are as follows: Strongly Undervalued below 11.06, Undervalued between 11.06 and 17.14, Fairly Valued between 29.32 and 17.14, Overvalued between 29.32 and 35.40, and Strongly Overvalued above 35.40. The current Forward EV/EBIT of 17.60 falls within the Historic Trend Line -Fairly Valued range.

30.23

Warner Music Group Corp. (WMG) has a current PS of 30.23. The 5-year average PS is 2.98. The thresholds are as follows: Strongly Undervalued below -1.68, Undervalued between -1.68 and 0.65, Fairly Valued between 5.31 and 0.65, Overvalued between 5.31 and 7.64, and Strongly Overvalued above 7.64. The current Forward PS of 30.23 falls within the Strongly Overvalued range.

18.81

P/OCF

Warner Music Group Corp. (WMG) has a current P/OCF of 18.81. The 5-year average P/OCF is 22.49. The thresholds are as follows: Strongly Undervalued below 9.82, Undervalued between 9.82 and 16.16, Fairly Valued between 28.83 and 16.16, Overvalued between 28.83 and 35.17, and Strongly Overvalued above 35.17. The current Forward P/OCF of 18.81 falls within the Historic Trend Line -Fairly Valued range.

22.41

P/FCF

Warner Music Group Corp. (WMG) has a current P/FCF of 22.41. The 5-year average P/FCF is 28.38. The thresholds are as follows: Strongly Undervalued below 9.37, Undervalued between 9.37 and 18.87, Fairly Valued between 37.88 and 18.87, Overvalued between 37.88 and 47.39, and Strongly Overvalued above 47.39. The current Forward P/FCF of 22.41 falls within the Historic Trend Line -Fairly Valued range.

Warner Music Group Corp (WMG) has a current Price-to-Book (P/B) ratio of 26.50. Compared to its 3-year average P/B ratio of 44.86 , the current P/B ratio is approximately -40.93% higher. Relative to its 5-year average P/B ratio of 160.30, the current P/B ratio is about -83.47% higher. Warner Music Group Corp (WMG) has a Forward Free Cash Flow (FCF) yield of approximately 0.04%. Compared to its 3-year average FCF yield of 3.96%, the current FCF yield is approximately -99.03% lower. Relative to its 5-year average FCF yield of 3.46% , the current FCF yield is about -98.89% lower.

26.75

P/B

Median3y

44.86

Median5y

160.30

3.85

FCF Yield

Median3y

3.96

Median5y

3.46

Competitors Valuation Multiple

The average P/S ratio for WMG's competitors is 29.37, providing a benchmark for relative valuation. Warner Music Group Corp Corp (WMG) exhibits a P/S ratio of 30.23, which is 2.93% above the industry average. Given its robust revenue growth of 8.69%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

WMG.O

Warner Music Group Corp

Rich Sparkle Holdings Ltd

26.40

330.00M

Performance Decomposition

Market capitalization of WMG decreased by 6.56% over the past 1 year. The primary factor behind the change was an increase in P/E Change from 27.45 to 53.60.

The secondary factor is the Revenue Growth, contributed 8.69%to the performance.

Overall, the performance of WMG in the past 1 year is driven by P/E Change. Which is more unsustainable.

8.69%

1.55B → 1.69B

Revenue Growth

-110.47%

9.07 → -0.95

Margin Expansion

95.22%

27.45 → 53.60

P/E Change

-6.56%