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Warner Music Group Corp Ordinary Shares - Class A WMG

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Stock XNAS Rating as of
$30.72 +0.10 (0.33%)
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As of Cboe BZX Real-Time Price Open
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Company Report

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Universal and Warner: Strong Competitive Advantages and Music Industry Growth Make Them Attractive

Matthew Dolgin

We’ve reevaluated the major record companies and think these firms will remain critical to artists and are positioned to continue taking their fair share of a growing music industry. For the two pure-play majors, we have upgraded Universal’s moat rating to wide from narrow, and we are maintaining our narrow moat rating for Warner. We’re maintaining our EUR 31 fair value estimate for Universal and raising Warner’s fair value estimate to $37 from $36.

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Price vs Fair Value

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WMG is trading at a 751% premium.
Price
$30.52
Fair Value
$79.00
Uncertainty
Medium
1-Star Price
$98.62
5-Star Price
$12.80
Economic Moat
Mrzmq
Capital Allocation
Pcthnwv

Bulls Say, Bears Say

Bulls

Talent will always be at the core of music industry sales, and major record labels like Warner are critical for artists to maximize success.

Bears

Warner’s smaller size and weaker current share of today’s most popular artists could eventually lead to Warner not being in the same class as the other majors in its ability to compete for talent and secure the most favorable terms.

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Trading Information

Previous Close Price
$30.62
Day Range
$30.67–30.72
52-Week Range
$25.28–38.01
Bid/Ask
$30.64 / $30.74
Market Cap
$15.89 Bil
Volume/Avg
2 / 2.4 Mil

Key Statistics

Price/Earnings (Normalized)
22.22
Price/Sales
2.47
Dividend Yield (Trailing)
2.25%
Dividend Yield (Forward)
2.25%
Total Yield
2.22%

Company Profile

Warner Music is the third-largest of the three major record companies. Recorded music accounts for most of the firm’s revenue, with the segment housing notable record labels including Atlantic Records, Warner Records, Elektra Records. Some of the most successful current artists signed to record deals with Warner include Ed Sheeran, Bruno Mars, Cardi B, and Dua Lipa. Warner’s remaining revenue comes from its publishing business, where Warner Chappell represents more than 150,000 songwriters and composers, some of whom are also Warner recording artists but many of whom are not recording artists or are attached to other labels. Warner Chappel controls more than 1 million musical compositions. Access Industries controls 98% of Warner’s voting rights, while holding a 73% economic interest.
Sector
Communication Services
Industry
Entertainment
Stock Style Box
Mid Growth
Total Number of Employees
5,900
Website
https://www.wmg.com

Competitors

Valuation

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Metric
WMG
UMG
6758
Price/Earnings (Normalized)
 22.2231.9919.12
Price/Book Value
 36.6117.132.25
Price/Sales
 2.474.621.32
Price/Cash Flow
 17.3931.488.91
Price/Earnings
WMG
UMG
6758

Financial Strength

Metric
WMG
UMG
6758
Quick Ratio
 0.500.430.44
Current Ratio
 0.690.620.66
Interest Coverage
 5.8916.9631.03
Quick Ratio
WMG
UMG
6758

Profitability

Metric
WMG
UMG
6758
Return on Assets (Normalized)
 7.52%12.87%2.86%
Return on Equity (Normalized)
 183.77%60.80%13.24%
Return on Invested Capital (Normalized)
 15.98%30.80%8.27%
Return on Assets
WMG
UMG
6758
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