Tencent Music Entertainment Group (NYSE:TME) shareholders may be worried that the stock price has fallen 13% in the last month. But that doesn’t take away from last year’s impressive returns; the stock has risen 113% in that time, like an eagle. So it’s important to view the recent share price decline through that lens. Only time will tell if the optimism reflected in the stock price is still overdone.
It’s been a good week for Tencent Music Entertainment Group shareholders, so let’s take a look at the longer term fundamentals.
Check out our latest analysis for Tencent Music Entertainment Group
To quote Buffett, “Ships will sail around the world, but the Flat Earth Society will thrive. There will continue to be a wide disconnect between price and value in the marketplace…” Comparing earnings per share (EPS) and share price trends can help you get a sense of how investor attitudes to a company have changed over time.
Tencent Music Entertainment Group was able to grow EPS by 25% over the last 12 months, and the 113% increase in the share price arguably outpaced the EPS growth, so it’s fair to assume that the market values the company more highly now than it did a year ago.
The image below shows how EPS has changed over time (if you click on the image you can see greater detail).
Earnings per Share Growth
We know Tencent Music Entertainment Group has improved its revenue recently, but will its earnings grow? Check out this free report showing analyst profit forecasts.
A different perspective
We’re pleased to report that Tencent Music Entertainment Group shareholders have received a total shareholder return of 115% over one year, including dividends. There’s no doubt that these recent returns are much better than the TSR loss of 1.0% per year over five years. We generally emphasize long-term performance over the short-term, but the recent improvement could suggest a (positive) inflection point within the business. Before deciding whether you like the current share price, see how Tencent Music Entertainment Group scores on the following three valuation metrics:
If you’re like me, then you won’t want to miss this free list of undervalued small stocks that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.