Stock fact sheet · data as of
Warner Music Group Corp. (WMG): fair value, margin of safety and Wheel Score
Communication Services · Entertainment · United States · Blend
Is WMG undervalued?
Warner Music Group Corp. (WMG) closed at 28.91 on 16 Oct 2026, 23% above the GLS average fair value of 23.45. Only 3 of the 9 models that produced a number value the shares above the current price. The margin of safety is negative, so the stock fails the "below fair value" rule of the Sunday Scan; a premium of this size is common for companies whose growth the models are conservative about.
There is a wide gap between Graham Number (6.89) and Payback Time (45.02). When the models are this far apart the "fair value" is really a range, and the margin of safety above should be read with that range in mind.
The nightly engine files WMG under Blend.
Nine valuation models for WMG
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 | 9.48 | -67% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 6.89 | -76% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 40.08 | +39% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 15.02 | -48% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 28.17 | -3% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 40.79 | +41% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 45.02 | +56% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 11.33 | -61% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 14.31 | -50% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -12.05 | -142% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 39.50 | +37% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Warner Music Group Corp. scores 6 of 9 on the Piotroski F-score: a middling result that passes the Sunday Scan's "6 or more" rule. Some of the nine tests on profitability, leverage and efficiency are failed, so the accounts are worth a look before selling a put on the name. On durability WMG scores 5.0/10 on the GLS Moat - a middle reading; the Scorecard on the Quote page's Financials tab shows which ten-year lines are steady and which are not.
Returns on capital are moderate - ROIC 6.9%, ROE 56.4%, ROA 3.7% - with debt at 7.12 times equity and a free-cash-flow yield of 5.4%. Debt of 7.12 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.
The dividend yield is 2.66% at a payout ratio of 89%; 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 Recorded Music 80%, Music Publishing 20% (quarter Q3 FY2026).
Institutional ownership scores 4/10, insider activity 10/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 6 / 9 | ROIC | 6.9% |
|---|---|---|---|
| GLS Moat | 5.0 / 10 | ROE | 56.4% |
| Debt / equity | 7.12 | ROA | 3.7% |
| Free-cash-flow yield | 5.4% | Payout ratio | 89% |
| Institutions | 4 / 10 | Insiders · Congress | 10 · 5 / 10 |
Wheel Score 63: Fair
A Wheel Score of 63 puts Warner Music Group Corp. in the Fair band - below the 70 the Sunday Scan requires. Value 3/25, Health 13/20, Moat 8/15, Premium 20/20 and Stability 19/20; the weakest part is Value (3/25).
Implied volatility is 46% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. Chain open interest is 13,906 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 1.7M shares a day on a market cap of $15.1B, with a beta of 1.40 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 19 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 3 / 25 | -23% margin of safety | |
| Health | 13 / 20 | Piotroski 6/9 | |
| Moat | 8 / 15 | moat 5.0/10 | |
| Premium | 20 / 20 | implied volatility 46% | |
| Stability | 19 / 20 | 1.7M shares/day, $15.1B cap, beta 1.40 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
The next earnings report is due on 19 Nov 2026, 34 days away; a 30-45-day put sold today would expire after it, which is worth weighing against the premium.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Entertainment
The 12 companies below are the closest to Warner Music Group Corp. by market cap within the Entertainment 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 |
|---|---|---|---|---|---|
| TKO TKO Group Holdings, Inc. | 172.38 | 215.97 | +20% | 80Prime | $12.6B |
| ROKU Roku, Inc. | 152.57 | 104.70 | -46% | 47Weak | $20.2B |
| FWONA Formula One Group | 83.32 | 83.10 | -0% | 60Fair | $20.9B |
| FWONB Formula One Group | 85.00 | 69.04 | -23% | 33No options | $21.0B |
| FWONK Liberty Media Corporation | 90.81 | 73.34 | -24% | 56Fair | $22.8B |
| MSGS Madison Square Garden Sports Corp. | 404.66 | 18.83 | -2049% | 53Fair | $9.7B |
| LLYVA Liberty Live Group | 96.44 | 120.78 | +20% | 45Weak | $9.2B |
| LLYVK Liberty Live Group | 99.66 | 120.73 | +17% | 45Weak | $9.2B |
| FOX Fox Corporation | 57.14 | 59.46 | +4% | 75Good | $25.4B |
| FOXA Fox Corporation | 63.98 | 58.37 | -10% | 74Good | $27.0B |
| LYV Live Nation Entertainment, Inc. | 172.51 | 59.90 | -188% | 53Fair | $40.2B |
| CNK Cinemark Holdings, Inc. | 38.52 | 59.12 | +35% | 80Prime | $4.5B |
⚖ Compare WMG with 7 of them All Communication Services stocks →
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Start free See the Sunday ScanQuestions about WMG
Is WMG undervalued right now?
No: at 28.91 the stock trades 23% above the GLS average fair value of 23.45 (data as of 16 Oct 2026). The margin of safety is negative.
What is the Wheel Score of WMG and what does it mean?
WMG scores 63 out of 100 (Fair). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for WMG?
23.45 per share as of 16 Oct 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 Warner Music Group Corp. report earnings next?
The next earnings report is due on 19 Nov 2026, 34 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does WMG have listed options, and how liquid are they?
Yes. The nightly snapshot found 234 listed contracts with 13,906 open interest across all expiries and implied volatility of 46% 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.