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Warner Music Group Corp Ordinary Shares - Class A WMG

Morningstar Rating
$35.42 −0.06 (0.17%)
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Company Report

Increasing Consumer Uptake of Streaming Services Can Help Drive Warner Music

Warner Music Group is the third largest of the three major global record labels, with Vivendi’s Universal Music first and Sony Music second. Like its peers, Warner increasingly depends on streaming. Streaming services delivered 65% of total recording segment revenue in fiscal 2023, up from 30% in fiscal 2016. This percentage actually understates the overall impact of streaming, as Warner Music does not break out the streaming portion of publishing revenue separately.

Price vs Fair Value

WMG is trading at a 2% discount.
Price
$35.42
Fair Value
$75.00
Uncertainty
High
1-Star Price
$27.10
5-Star Price
$57.60
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Music streaming services like Spotify still have a long runway for subscriber growth, bringing more revenue into the music ecosystem for labels and artists alike.

Bears

Warner is overly dependent on streaming services that are diversifying their revenue streams into areas like podcasts. The streaming platforms will demand lower royalty rates in the future as their power grows.

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News

Trading Information

Previous Close Price
$35.48
Day Range
$35.2335.77
52-Week Range
$23.6238.05
Bid/Ask
$35.07 / $35.68
Market Cap
$18.34 Bil
Volume/Avg
1.5 Mil / 1.5 Mil

Key Statistics

Price/Earnings (Normalized)
30.58
Price/Sales
2.90
Dividend Yield (Trailing)
1.89%
Dividend Yield (Forward)
1.92%
Total Yield
1.89%

Company Profile

Warner Music Group is the third largest of the three major global record labels, with Vivendi’s Universal Music first and Sony Music second. Warner’s larger segment, recorded music, consists of iconic labels like Atlantic Records, Warner Records, and Parlophone Records and popular artists such as Ed Sheeran, Cardi B, Dua Lipa, and Blake Shelton. Warner Chappell, the firm’s publishing arm, is the home to over 65,000 composers and songwriters with over 1 million copyrights represented. Warner is controlled by Access Industries, which owns an 84% economic interest and 99% of voting rights.
Sector
Communication Services
Industry
Entertainment
Stock Style Box
Mid Growth
Total Number of Employees
5,900

Competitors

Valuation

Metric
WMG
SPOT
UMG
Price/Earnings (Normalized)
30.5832.14
Price/Book Value
39.6119.0919.62
Price/Sales
2.903.674.67
Price/Cash Flow
20.82224.9530.39
Price/Earnings
WMG
SPOT
UMG

Financial Strength

Metric
WMG
SPOT
UMG
Quick Ratio
0.521.240.43
Current Ratio
0.701.290.62
Interest Coverage
5.74−11.9816.96
Quick Ratio
WMG
SPOT
UMG

Profitability

Metric
WMG
SPOT
UMG
Return on Assets (Normalized)
6.30%−0.79%12.46%
Return on Equity (Normalized)
167.46%−2.65%65.11%
Return on Invested Capital (Normalized)
13.64%−3.06%27.96%
Return on Assets
WMG
SPOT
UMG
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