Stock fact sheet · data as of
Warner Music Group Corp. (WMG): fair value, margin of safety and Wheel Score
Ticker symbol WMG · Communication Services · Entertainment · United States · Class A common stock · Growth
WMG is Warner Music Group Corp.'s Class A common stock. The classes own the same business, share the same earnings report and trade within a few cents of each other; what differs is mainly the vote each share carries - the company's annual report sets out the voting rights.
Is WMG undervalued?
Warner Music Group Corp. (WMG) closed at 32.55 on 5 Nov 2026, 38% above the GLS average fair value of 23.54. 6 of the 9 models that produced a number value the shares below the current price. A gap this wide usually means the market is paying for growth or a story the trailing numbers do not show yet; the models work from filed results, not forecasts, so they are conservative by design.
There is a wide gap between Graham Number (6.89) and Payback Time (44.90). 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.
Ranked against every other company we cover, WMG is clearly faster-growing than it is cheap, so the nightly engine files it under Growth (value score 17, growth score 47, out of 100).
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 | 10.62 | -67% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 6.89 | -79% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 40.08 | +23% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 15.02 | -54% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 27.89 | -14% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 40.79 | +25% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 44.90 | +38% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 11.33 | -65% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 14.31 | -56% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -12.05 | -137% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 39.50 | +21% | 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 "Piotroski 6 or more" Wheel Trade Filter. 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 5.6/10 on the GLS Moat - a middle reading; the Moat Score tab on the Quote page's Financials view shows which of the four parts hold it back.
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 4.8%. 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 2.37% 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 | 5.6 / 10 | ROE | 56.4% |
| Debt / equity | 7.12 | ROA | 3.7% |
| Free-cash-flow yield | 4.8% | Payout ratio | 89% |
| Institutions | 4 / 10 | Insiders · Congress | 10 · 5 / 10 |
Wheel Score 39: Weak
With a Wheel Score of 39 Warner Music Group Corp. sits in the Weak band. It fails filter 3, below fair value - trades 38% above our fair value; and filter 5, can repay its debt - 6.4 years to repay its debt (over 3); Value (weak) is its weakest part.
Implied volatility is 35% 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 12,608 contracts across all expiries - enough for the wheel at normal size.
Volume runs at 1.9M shares a day on a market cap of $17.0B, with a beta of 1.34 - 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 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 | Fails | trades 38% above our fair value |
| 4 | Financially healthy | Passes | Piotroski F-score 6 or more out of 9 (a company with no score on file passes) |
| 5 | Can repay its debt | Fails | 6.4 years to repay its debt (over 3) |
| 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 | Weak | 38% above fair value | |
| Premium | Strong | implied volatility 35% | |
| Moat | Fair | moat 5.6/10 | |
| Health | Good | Piotroski 6/9 | |
| Red Flags | Strong | Red Flags score 90/100 | |
| Option trading | Fair | 642 contracts a day, 12,608 open interest | |
| Stability | Good | beta 1.34, $17.0B 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
Warner Music Group Corp. reports earnings on 19 Nov 2026 (after the close) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
No analyst upgrades or downgrades were recorded in the last 30 days.
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. | 193.48 | 319.45 | +39% | 51Fair | $14.1B |
| ROKU Roku, Inc. | 162.77 | 134.99 | -21% | 27Weak | $21.6B |
| FWONB Formula One Group | 85.00 | 70.65 | -20% | 19No options | $22.8B |
| FWONA Formula One Group | 91.03 | 85.75 | -6% | 26Weak | $22.8B |
| FWONK Liberty Media Corporation | 98.93 | 87.93 | -13% | 33Weak | $24.8B |
| FOX Fox Corporation | 61.62 | 82.53 | +25% | 53Fair | $27.5B |
| LLYVA Liberty Live Group | 106.37 | 19.11 | -457% | 23Weak | $10.2B |
| LLYVK Liberty Live Group | 110.35 | 19.12 | -477% | 27Weak | $10.2B |
| FOXA Fox Corporation | 69.65 | 86.99 | +20% | 53Fair | $29.4B |
| SKYD Skydance Corporation | 8.39 | 2.94 | -185% | 32Weak | $9.2B |
| LYV Live Nation Entertainment, Inc. | 183.18 | 60.63 | -202% | 37Weak | $42.7B |
| VSNT Versant Media Group, Inc. Class A | 33.98 | 147.60 | +77% | 80Good | $4.7B |
⚖ Compare WMG with 7 of them All Communication Services stocks →
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Start free See the Sunday ScanQuestions about WMG
What kind of share is WMG?
WMG is Warner Music Group Corp.'s Class A common stock. The classes own the same business, share the same earnings report and trade within a few cents of each other; what differs is mainly the vote each share carries - the company's annual report sets out the voting rights.
Is WMG undervalued right now?
No: at 32.55 the stock trades 38% above the GLS average fair value of 23.54 (data as of 5 Nov 2026), well beyond what trailing earnings, cash flow and book value support.
What is the Wheel Score of WMG and what does it mean?
WMG scores 39 out of 100 (Weak) - it fails Wheel Trade Filters 3, 5. 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 WMG?
23.54 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 Warner Music Group Corp. report earnings next?
The next earnings report is due on 19 Nov 2026 (after the close), 14 days from the data date of 5 Nov 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 130 listed contracts with 12,608 open interest across all expiries and implied volatility of 35% 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.