(WMG) Warner Music - Overview
Sector: Communication Services | Industry: Entertainment | Exchange: NASDAQ (USA) | Market Cap: 17.638m USD | Total Return: 23.4% in 12m
Avg Turnover: 91.5M
EPS Trend: 71.3%
Qual. Beats: 1
Rev. Trend: 90.8%
Qual. Beats: 4
Warnings
Altman Z'' -0.74 < 1.0 - financial distress zone
Below Avwap Earnings
Tailwinds
Garp
Warner Music Group (WMG) is a global music entertainment company operating through two primary segments: Recorded Music and Music Publishing. The company manages a vast portfolio of record labels, including Atlantic, Warner Records, and Parlophone, overseeing the discovery, development, and distribution of recording artists across all major genres. Its music publishing arm, Warner Chappell Music, controls and licenses a catalog of approximately two million musical compositions for use in film, television, and digital media.
The business model relies heavily on intellectual property monetization, where revenue is generated through physical sales, digital downloads, and performance royalties. A critical driver for the sector is the continued growth of paid streaming services, which provide recurring licensing revenue from platforms like Spotify and Apple Music. Additionally, music publishers benefit from statutory mechanical royalties and synchronization fees, which offer a hedge against fluctuations in live performance markets.
Investors may find it useful to examine ValueRay for further data on industry valuation trends. Warner Music Group remains a central player in the global entertainment landscape, leveraging its historical catalog and modern distribution networks to capture value from diverse media consumption channels.
- Streaming subscription price increases drive recorded music and publishing revenue growth
- Global digital music consumption expansion offsets declining physical and download sales
- AI copyright regulation and licensing terms impact long-term royalty monetization potential
- Artist roster turnover and high signing costs influence operating margin stability
- Rising interest rates affect debt servicing costs for highly leveraged capital structure
| Net Income: 452.0m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.06 > 0.02 and ΔFCF/TA -0.09 > 1.0 |
| NWC/Revenue: -16.85% < 20% (prev -20.79%; Δ 3.95% < -1%) |
| CFO/TA 0.08 > 3% & CFO 851.0m > Net Income 452.0m |
| Net Debt (4.42b) to EBITDA (1.25b): 3.52 < 3 |
| Current Ratio: 0.73 > 1.5 & < 3 |
| Outstanding Shares: last quarter (519.0m) vs 12m ago -0.24% < -2% |
| Gross Margin: 45.80% > 18% (prev 0.47%; Δ 4.53k% > 0.5%) |
| Asset Turnover: 70.65% > 50% (prev 66.20%; Δ 4.45% > 0%) |
| Interest Coverage Ratio: 4.54 > 6 (EBITDA TTM 1.25b / Interest Expense TTM 169.0m) |
| A: -0.11 (Total Current Assets 3.22b - Total Current Liabilities 4.42b) / Total Assets 10.6b |
| B: -0.11 (Retained Earnings -1.17b / Total Assets 10.6b) |
| C: 0.08 (EBIT TTM 767.0m / Avg Total Assets 10.1b) |
| D: -0.14 (Book Value of Equity -1.40b / Total Liabilities 9.64b) |
| Altman-Z'' = -0.74 = B |
| DSRI: 1.10 (Receivables 1.50b/1.22b, Revenue 7.13b/6.33b) |
| GMI: 1.02 (GM 45.80% / 46.81%) |
| AQI: 0.98 (AQ_t 0.64 / AQ_t-1 0.65) |
| SGI: 1.13 (Revenue 7.13b / 6.33b) |
| TATA: -0.04 (NI 452.0m - CFO 851.0m) / TA 10.6b) |
| Beneish M = -2.88 (Cap -4..+1) = A |
As of May 30, 2026, the stock is trading at USD 31.54 with a total of 2,841,520 shares traded.
Over the past week, the price has changed by -8.29%,
over one month by +13.59%,
over three months by +10.89% and
over the past year by +23.42%.
Warner Music has received a consensus analysts rating of 3.89. Therefore, it is recommended to buy WMG.
- StrongBuy: 9
- Buy: 2
- Hold: 6
- Sell: 1
- StrongSell: 1
| Analysts Target Price | 38.1 | 20.9% |
P/E Trailing = 40.256
P/E Forward = 19.0114
P/S = 2.5404
P/B = 24.54
P/EG = 0.7099
Revenue TTM = 7.13b USD
EBIT TTM = 767.0m USD
EBITDA TTM = 1.25b USD
Long Term Debt = 4.72b USD (from longTermDebt, last quarter)
Short Term Debt = 48.0m USD (from shortTermDebt, last quarter)
Debt = 5.16b USD (from shortLongTermDebtTotal, last quarter) + Leases 222.0m
Net Debt = 4.42b USD (calculated: Debt 5.16b - CCE 741.0m)
Enterprise Value = 22.1b USD (17.6b + Debt 5.16b - CCE 741.0m)
Interest Coverage Ratio = 4.54 (Ebit TTM 767.0m / Interest Expense TTM 169.0m)
EV/FCF = 32.68x (Enterprise Value 22.1b / FCF TTM 675.0m)
FCF Yield = 3.06% (FCF TTM 675.0m / Enterprise Value 22.1b)
FCF Margin = 9.47% (FCF TTM 675.0m / Revenue TTM 7.13b)
Net Margin = 6.34% (Net Income TTM 452.0m / Revenue TTM 7.13b)
Gross Margin = 45.80% ((Revenue TTM 7.13b - Cost of Revenue TTM 3.86b) / Revenue TTM)
Gross Margin QoQ = 46.30% (prev 46.36%)
Tobins Q-Ratio = 2.08 (Enterprise Value 22.1b / Total Assets 10.6b)
Interest Expense / Debt = 3.27% (Interest Expense 169.0m / Debt 5.16b)
Taxrate = 28.74% (73.0m / 254.0m)
NOPAT = 546.6m (EBIT 767.0m * (1 - 28.74%))
Current Ratio = 0.73 (Total Current Assets 3.22b / Total Current Liabilities 4.42b)
Debt / Equity = 7.00 (Debt 5.16b / totalStockholderEquity, last quarter 738.0m)
Debt / EBITDA = 3.52 (Net Debt 4.42b / EBITDA 1.25b)
Debt / FCF = 6.55 (Net Debt 4.42b / FCF TTM 675.0m)
Total Stockholder Equity = 673.5m (last 4 quarters mean from totalStockholderEquity)
RoA = 4.48% (Net Income 452.0m / Total Assets 10.6b)
RoE = 24.49% (Net Income TTM 452.0m / Total Stockholder Equity 1.85b)
RoCE = 11.68% (EBIT 767.0m / Capital Employed (Equity 1.85b + L.T.Debt 4.72b))
RoIC = 9.69% (NOPAT 546.6m / Invested Capital 5.64b)
WACC = 6.70% (E(17.6b)/V(22.8b) * Re(7.98%) + D(5.16b)/V(22.8b) * Rd(3.27%) * (1-Tc(0.29)))
Discount Rate = 7.98% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: 59.81 | Cagr: 0.22%
[DCF] Terminal Value 76.59% ; FCFF base≈651.8m ; Y1≈705.4m ; Y5≈867.9m
[DCF] Fair Price = 60.68 (EV 13.3b - Net Debt 4.42b = Equity 8.87b / Shares 146.2m; r=8.35% [WACC [floored]]; 5y FCF grow 9.40% → 2.50% )
EPS Correlation: 71.34 | EPS CAGR: 11.92% | SUE: 1.14 | # QB: 1
Revenue Correlation: 90.81 | Revenue CAGR: 5.22% | SUE: 1.75 | # QB: 4
EPS current Quarter (2026-06-30): EPS=0.39 | Chg30d=+2.66% | Revisions=-25% | Analysts=4
EPS current Year (2026-09-30): EPS=1.84 | Chg30d=+23.02% | Revisions=+60% | GrowthEPS=+50.5% | GrowthRev=+8.5%
EPS next Year (2027-09-30): EPS=1.96 | Chg30d=+11.02% | Revisions=+60% | GrowthEPS=+6.5% | GrowthRev=+5.9%
[Analyst] Revisions Ratio: +60%