Key Considerations for Warner Music Investors

By Ken Smith • Thursday, June 13 16:29 • Permanent Link

With gains of 3.5%, Warner Music was one of the winners on Wall Street today. Its shares are now trading at $31.68 and have logged a 0.0% daily outperformance of the S&P 500. Don't join the feeding frenzy before checking some basic facts about this stock:

Warner Music has moved 14.0% over the last year, and the S&P 500 logged a change of 22.5%
WMG has an average analyst rating of buy and is -17.35% away from its mean target price of $38.33 per share
Its trailing earnings per share (EPS) is $1.01
Warner Music has a trailing 12 month Price to Earnings (P/E) ratio of 31.4 while the S&P 500 average is 27.65
Its forward earnings per share (EPS) is $1.52 and its forward P/E ratio is 20.8
The company has a Price to Book (P/B) ratio of 37.89 in contrast to the S&P 500's average ratio of 4.59
Warner Music is part of the Consumer Discretionary sector, which has an average P/E ratio of 22.06 and an average P/B of 3.18
WMG has reported YOY quarterly earnings growth of 186.8% and gross profit margins of 0.5%
The company has a free cash flow of $682.75 Million, which refers to the total sum of all its inflows and outflows of cash over the last quarter
Warner Music Group Corp. operates as a music entertainment company in the United States, the United Kingdom, Germany, and internationally. It operates through Recorded Music and Music Publishing segments. The Recorded Music segment is involved in the discovery and development of recording artists, as well as related marketing, promotion, distribution, sale, and licensing of music created by such recording artists; markets its music catalog through compilations and reissuances of previously released music and video titles, as well as previously unreleased materials; and conducts its operation primarily through a collection of record labels, such as Warner Records and Atlantic Records, as well as Asylum, Big Beat, Canvasback, East West, Erato, FFRR, Fueled by Ramen, Nonesuch, Parlophone, Reprise, Roadrunner, Sire, Spinnin' Records, Warner Classics, and Warner Music Nashville. This segment markets, distributes, and sells music and video products to retailers and wholesale distributors; independent labels to retail and wholesale distributors; and various distribution centers and ventures, as well as retail outlets, online physical retailers, streaming services, and download services. The Music Publishing segment owns and acquires rights to approximately one million musical compositions comprising pop hits, American standards, folk songs, and motion picture and theatrical compositions. Its catalog includes approximately 150,000 songwriters and composers; and various genres, including pop, rock, jazz, classical, country, R&B, hip-hop, rap, reggae, Latin, folk, blues, symphonic, soul, Broadway, electronic, alternative, and gospel. This segment also administers the music and soundtracks of various third-party television and film producers and studios. The company was founded in 1929 and is headquartered in New York, New York.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.