Stock fact sheet · data as of
Tencent Music Entertainment Group (TME): fair value, margin of safety and Wheel Score
Ticker symbol TME · Communication Services · Internet Content & Information · China · ADR · Blend
TME is an American depositary share (ADR): the US listing of Tencent Music Entertainment Group, whose own shares trade on its home exchange. It trades in dollars during US hours; currency moves and the home country's rules also affect it, and the depositary bank charges a small yearly fee.
Is TME undervalued?
At 9.48 (close of 5 Nov 2026), TME trades 48% below the GLS average fair value of 18.07. That average comes from 9 models run on the latest filings, and 6 of them land above the current price. Margins of safety over 30% are the exception rather than the rule across the ~7,400 stocks we value each night, so the number earns Tencent Music Entertainment Group the full Value points in the Wheel Score - and a closer look at what the market is pricing in.
The 9 models disagree widely: DDM gives 3.37 while GLS Growth gives 46.39. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
Ranked against every other company we cover, neither cheapness nor growth clearly wins for TME, so the nightly engine files it under Blend (value score 67, growth score 71, out of 100).
Nine valuation models for TME
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 12.11 | +28% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 11.75 | +24% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 20.49 | +116% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 6.95 | -27% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 46.39 | +389% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 21.16 | +123% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 31.20 | +229% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 3.37 | -64% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 9.22 | -3% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | 1.20 | -87% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 12.50 | +32% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Financial health is weak: TME passes 4 of the nine Piotroski tests. Our scans drop the stock at the health filter; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is 5.9 out of 10: a record that is solid on some of the four parts the score weighs (returns on capital, pricing power, lasting growth, balance sheet) and weaker on others.
Returns on capital are high - ROIC 13.1%, ROE 13.8%, ROA 10.8% - with debt at 0.05 times equity and a free-cash-flow yield of 9.8%.
The dividend yield is 2.41% at a payout ratio of 0%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Online Music Services 98%, Online Music Services To Associates 2%, Social Entertainment Services And Other… 0% (fiscal year FY2025).
Institutional ownership scores 4/10, insider activity 10/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 4 / 9 | ROIC | 13.1% |
|---|---|---|---|
| GLS Moat | 5.9 / 10 | ROE | 13.8% |
| Debt / equity | 0.05 | ROA | 10.8% |
| Free-cash-flow yield | 9.8% | Payout ratio | 0% |
| Institutions | 4 / 10 | Insiders · Congress | 10 · 5 / 10 |
Wheel Score 54: Fair
TME scores 54 out of 100 on the Wheel Score (Fair band, 50-69) because it fails filter 4, financially healthy - Piotroski 4/9 (under 6). A stock must pass all 9 Wheel Trade Filters to reach 70. Otherwise the parts read: value strong, premium strong, moat fair, health fair, red flags good, option trading strong, stability good.
Implied volatility is 44% on the near-the-money contracts 20-60 days out - inside the 35-60% sweet spot the Wheel Score rewards most: enough premium to be worth selling, not so much that the risk is unpaid. Chain open interest is 45,976 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 6.1M shares a day on a market cap of $15.5B, with a beta of 0.73 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score rates that good.
| Filter | Wheel Trade Filter | Result | Detail |
|---|---|---|---|
| 1 | Options that actually trade | Passes | Listed options with 1,000+ contracts of open interest and 100+ traded a day |
| 2 | A real business, not a gamble | Passes | Profitable over the last twelve months - not a speculative stock, fund or note |
| 3 | Below fair value | Passes | Trading below the nine-model average fair value (margin of safety above 0) |
| 4 | Financially healthy | Fails | Piotroski 4/9 (under 6) |
| 5 | Can repay its debt | Passes | Long-term debt repaid from 3 years of operating cash flow or less (6 for real estate and utilities; banks and insurers are not judged on it) |
| 6 | No serious red flags | Passes | Red Flags score 60 or more out of 100 (earnings, margins, debt, analysts, filings and price checked the same way for every stock) |
| 7 | A premium worth selling | Passes | Implied volatility 25-80% (enough premium, not a lottery ticket) |
| 8 | Big enough | Passes | Market cap $1 billion or more |
| 9 | Not a penny stock | Passes | Share price $5 or more |
| How it ranks | Rating | From | |
|---|---|---|---|
| Value | Strong | 48% below fair value | |
| Premium | Strong | implied volatility 44% | |
| Moat | Fair | moat 5.9/10 | |
| Health | Fair | Piotroski 4/9 | |
| Red Flags | Good | Red Flags score 85/100 | |
| Option trading | Strong | 6,700 contracts a day, 45,976 open interest | |
| Stability | Good | beta 0.73, $15.5B company |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls: a stock must pass all 9 Wheel Trade Filters to score 70, and the score then ranks the ones that pass; the Sunday Scan is the top 10. It is updated nightly and is not a recommendation. How the Wheel Score works · the walkthrough lesson shows how it fits into a trade, start to finish.
Upcoming events
Tencent Music Entertainment Group reports earnings on 17 Nov 2026 (before the open) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Internet Content & Information
The 12 companies below are the closest to Tencent Music Entertainment Group by market cap within the Internet Content & Information industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| RDDT Reddit, Inc. | 101.77 | 166.26 | +39% | 82Good | $19.6B |
| PINS Pinterest, Inc. | 21.22 | 16.34 | -30% | 38Weak | $10.6B |
| SNAP Snap Inc. | 5.92 | 9.86 | +40% | 39Weak | $10.0B |
| MTCH Match Group, Inc. | 40.21 | 92.70 | +57% | 53Fair | $9.2B |
| BIDU Baidu, Inc. | 80.43 | 428.53 | +81% | 52Fair | $27.4B |
| ZG Zillow Group, Inc. Class A | 34.45 | 17.01 | -103% | 18Weak | $7.7B |
| Z Zillow Group, Inc. Class C | 33.90 | 17.01 | -99% | 22Weak | $7.6B |
| BILI Bilibili Inc. | 13.88 | 25.38 | +45% | 51Fair | $5.8B |
| JOYY JOYY, Inc. Sponsored ADR Class A | 81.21 | 91.04 | +11% | 40Weak | $4.0B |
| CARG CarGurus, Inc. | 36.52 | 44.92 | +19% | 81Good | $3.3B |
| PPLI People Incorporated | 41.99 | 13.80 | -204% | 33Weak | $3.2B |
| DASH DoorDash, Inc. | 198.59 | 112.83 | -76% | 40Weak | $86.6B |
⚖ Compare TME with 7 of them All Communication Services stocks →
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Start free See the Sunday ScanQuestions about TME
Is TME undervalued right now?
By the GLS models, yes: at 9.48 the stock is 48% below the average fair value of 18.07 (data as of 5 Nov 2026). Whether the discount is deserved is the question to research next.
What is the Wheel Score of TME and what does it mean?
TME scores 54 out of 100 (Fair) - it fails Wheel Trade Filter 4. The Wheel Score ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned - in two parts: the 9 pass/fail Wheel Trade Filters (busy options, a real business, below fair value, Piotroski 6 or more, debt it can repay, a Red Flags score of 60 or more, implied volatility of 25-80%, a $1 billion company, $5 a share) and a ranking of how strongly a stock passes on value, premium, moat, health, red flags, option trading and stability. A stock that fails any filter stays under 70; 70-84 is Good, 85 and above is Prime. The Sunday Scan is the top 10 that pass, sorted by Wheel Score.
What is the GLS fair value for TME?
18.07 per share as of 5 Nov 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Tencent Music Entertainment Group report earnings next?
The next earnings report is due on 17 Nov 2026 (before the open), 12 days from the data date of 5 Nov 2026. The Calendars page lists every upcoming report with its time of day.
Does TME have listed options, and how liquid are they?
Yes. The nightly snapshot found 42 listed contracts with 45,976 open interest across all expiries and implied volatility of 44% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.
Is TME an ADR?
Yes. TME is an American depositary share (ADR): the US listing of Tencent Music Entertainment Group, whose own shares trade on its home exchange. It trades in dollars during US hours; currency moves and the home country's rules also affect it, and the depositary bank charges a small yearly fee.