Fact based stock research
Warner Music Group (NasdaqGS:WMG)

US9345502036

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Warner Music Group stock research in summary

wmg.com

ANALYSIS: With an Obermatt Combined Rank of 54 (better than 54% compared with investment alternatives), Warner Music Group (Movies & Entertainment, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Warner Music Group are a good value (attractively priced) with a consolidated Value Rank of 63 (better than 63% of alternatives), show above-average growth (Growth Rank of 63) but are riskily financed (Safety Rank of 29), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 54, is a buy recommendation based on Warner Music Group's financial characteristics. As the company Warner Music Group's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 63) and above-average growth (Obermatt Growth Rank of 63), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 29) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	63
Growth Rank	63
Safety Rank	29
Combined Rank	54

Country	USA
Industry	Movies & Entertainment
Index	Dividends USA, NASDAQ
Size class	X-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Warner Music Group

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	55	55	50	63
GROWTH
GROWTH	75	85	53	63
SAFETY
SAFETY	12	17	19	29
SENTIMENT
SENTIMENT	n/a	87	30	^new
360° VIEW
360° VIEW	n/a	91	18	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Warner Music Group is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	55	55	50	63
GROWTH
GROWTH	75	85	53	63
SAFETY
SAFETY	12	17	19	29
COMBINED
COMBINED	42	67	36	54

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Warner Music Group the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 63 (better than 63% compared with alternatives), Warner Music Group shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Warner Music Group. Price-to-Profit (also referred to as price-earnings, P/E) is 52 which means that the stock price compared with what market professionals expect for future profits is lower than for 52% of comparable companies, indicating a good value concerning Warner Music Group's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 12, which means that the stock price is lower as regards to invested capital than for 12% of comparable investments. On the other hand, Price-to-Sales is less favorable than 54% of alternatives (only 46% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 7% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 63, is a buy recommendation based on Warner Music Group's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	50	45	41	46
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	57	27	45	52
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	1	1	7	12
DIVIDEND YIELD
DIVIDEND YIELD	83	95	92	93
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	55	55	50	63

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Warner Music Group; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 63 (better than 63% compared with alternatives), Warner Music Group shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for Warner Music Group. While Profit Growth has a good rank of 78, as professionals currently expect the company to grow its profits more than 78% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 38, which means that currently professionals expect the company to grow less than 62% of its competitors, while Capital Growth has a rank of 48 and Stock Returns have been below market median, with a rank of 41 (59% of alternative investments were better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 63, is a buy recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	50	33	41	38
PROFIT GROWTH
PROFIT GROWTH	n/a	88	73	78
CAPITAL GROWTH
CAPITAL GROWTH	n/a	44	44	48
STOCK RETURNS
STOCK RETURNS	69	73	47	41
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	75	85	53	63

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Warner Music Group.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 29 (better than 29% compared with alternatives), the company Warner Music Group has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Warner Music Group is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Warner Music Group. Liquidity is at 79, meaning the company generates more profit to service its debt than 79% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 17, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 83% of its competitors. Leverage is also high at a rank of 10, which means that the company has an above-average debt-to-equity ratio. It has more debt than 90% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 29 (worse than 71% compared with alternatives), Warner Music Group has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	19	8	6	10
REFINANCING
REFINANCING	8	1	13	17
LIQUIDITY
LIQUIDITY	39	64	62	79
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	12	17	19	29

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Warner Music Group and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	26	25	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	45	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	85	68	^new
MARKET PULSE
MARKET PULSE	n/a	78	49	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	87	30	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Warner Music Group.
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