Warner Music Group Corp. beat earnings expectations, raising questions over whether its stock remains undervalued. Earnings beat may moderately lift WMG investor sentiment and near-term stock valuation.
| Nov 25 | Feb 26 | May 26 | Aug 26 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Buy | — | — | 2 | — | — | — | — | — | — | — | — | — |
| Sell | — | — | — | — | — | — | — | — | — | — | — | — |
| total | individual payouts | |
|---|---|---|
| 2028 | ‡‡‡‡‡ |
|
| 2027 | ‡‡‡‡‡ |
|
| 2026 | 0.77 |
—
—
—
|
| 2025 | 0.74 |
—
—
—
—
|
| 2024 | 0.70 |
—
—
—
—
|
| 2023 | 0.66 |
—
—
—
—
|
| 2022 | 0.62 |
—
—
—
—
|
| 2021 | 0.54 |
—
—
—
—
|
| 2020 | 0.24 |
—
—
|
| 2019 | ‡‡‡‡‡ |
|
| 2023 | 2024 | 2025 | Q'26 | |
|---|---|---|---|---|
| Cash | 641.00 | 694.00 | 532.00 | 618.00 |
| Receivables | 1,120.00 | 1,255.00 | 1,340.00 | 1,607.00 |
| Inventory | 126.00 | 99.00 | 62.00 | 69.00 |
| Other | 413.00 | 470.00 | 670.00 | 739.00 |
| 2,402.00 | 2,643.00 | 2,770.00 | 3,260.00 |
| 2023 | 2024 | 2025 | Q'26 | |
|---|---|---|---|---|
| Payables | 300.00 | 289.00 | 257.00 | 354.00 |
| ST’ Debt | 41.00 | — | — | — |
| Other | 57.00 | 110.00 | 178.00 | 151.00 |
| 3,539.00 | 3,897.00 | 4,201.00 | 4,443.00 |
| 10y | 5y | 3y | |
| Sales | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ |
| Cash Flow | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ |
| Earnings | ‡‡‡ | ‡‡‡ | ‡‡‡‡‡ |
| Book Value | ‡‡‡‡‡ | ‡‡‡ | ‡‡‡‡‡ |
| Dec | Mar | Jun | Sep | Year | |
|---|---|---|---|---|---|
| ’26 | 1,840.00 | 1,732.00 | 1,864.00 | — |
—
|
| ’25 | 1,666.00 | 1,484.00 | 1,689.00 | 1,868.00 |
6,707.00
|
| ’24 | 1,748.00 | 1,494.00 | 1,554.00 | 1,630.00 |
6,426.00
|
| ’23 | 1,488.00 | 1,399.00 | 1,564.00 | 1,586.00 |
6,037.00
|
| ’22 | 1,614.00 | 1,376.00 | 1,432.00 | 1,497.00 |
5,919.00
|
| ’21 | 1,335.00 | 1,250.00 | 1,340.00 | 1,376.00 |
5,301.00
|
| ’20 | 1,256.00 | 1,071.00 | 1,010.00 | 1,126.00 |
4,463.00
|
| Dec | Mar | Jun | Sep | Year | |
|---|---|---|---|---|---|
| ’26 | 440.00 | 126.00 | 142.00 | — |
—
|
| ’25 | 332.00 | 69.00 | 46.00 | 231.00 |
678.00
|
| ’24 | 293.00 | (31.00) | 188.00 | 304.00 |
754.00
|
| ’23 | 209.00 | (6.00) | 146.00 | 338.00 |
687.00
|
| ’22 | 129.00 | 44.00 | 163.00 | 406.00 |
742.00
|
| ’21 | 169.00 | 150.00 | 91.00 | 228.00 |
638.00
|
| ’20 | 78.00 | 86.00 | 123.00 | 176.00 |
463.00
|
| Dec | Mar | Jun | Sep | Year | |
|---|---|---|---|---|---|
| ’26 | 420.00 | 99.00 | 114.00 | — |
—
|
| ’25 | 296.00 | 33.00 | 7.00 | 203.00 |
539.00
|
| ’24 | 264.00 | (57.00) | 160.00 | 271.00 |
638.00
|
| ’23 | 188.00 | (41.00) | 113.00 | 300.00 |
560.00
|
| ’22 | 95.00 | 16.00 | 128.00 | 368.00 |
607.00
|
| ’21 | 151.00 | 130.00 | 71.00 | 193.00 |
545.00
|
| ’20 | 63.00 | 73.00 | 103.00 | 139.00 |
378.00
|
| Dec | Mar | Jun | Sep | Year | |
|---|---|---|---|---|---|
| ’26 | 0.33 | 0.34 | 0.38 | — |
—
|
| ’25 | 0.45 | 0.07 | (0.03) | 0.21 |
0.69
|
| ’24 | 0.30 | 0.18 | 0.27 | 0.08 |
0.83
|
| ’23 | 0.23 | 0.06 | 0.23 | 0.29 |
0.82
|
| ’22 | 0.36 | 0.18 | 0.24 | 0.28 |
1.06
|
| ’21 | 0.18 | 0.22 | 0.12 | 0.05 |
0.58
|
| ’20 | 0.24 | (0.15) | (1.03) | 0.00 |
(0.95)
|
| 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| — | — | — | — | ‡‡‡‡‡ | ‡‡‡‡ | 21.57 | 23.62 | 27.06 | 25.56 | — | — | — |
Low Price
|
| — | — | — | — | ‡‡‡‡‡ | ‡‡‡‡‡ | 44.64 | 38.76 | 38.05 | 36.64 | — | — | — |
High Price
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 6,200 | 5,900 | 5,800 | 5,500 | — | — | — |
Employees
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 0.95 | 1.02 | 1.11 | 1.22 | — | — | — |
Revenue/Emp
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 5,919.00 | 6,037.00 | 6,426.00 | 6,707.00 | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ |
Revenue
|
| ‡‡‡‡‡ | ‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 47.96% | 47.37% | 47.79% | 45.85% | — | — | — |
Gross Margin
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 740.00 | 609.00 | 601.00 | 490.00 | ‡‡‡‡‡ | — | — |
EBT
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 12.50% | 10.09% | 9.35% | 7.31% | ‡‡‡ | ‡‡‡ | ‡‡‡ |
EBT Margin
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 555.00 | 439.00 | 478.00 | 370.00 | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ |
Net Income
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 339.00 | 332.00 | 327.00 | 376.00 | — | — | — |
Depreciation
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 11.50 | 11.71 | 12.42 | 12.89 | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ |
Revenue/Sh
|
| ‡‡‡‡ | ‡‡‡‡ | ‡‡‡ | ‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡ | 1.06 | 0.82 | 0.83 | 0.69 | ‡‡‡‡ | ‡‡‡‡ | ‡‡‡‡‡ |
Earnings/Sh
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 1.44 | 1.33 | 1.46 | 1.30 | ‡‡‡‡ | — | — |
Cash Flow/Sh
|
| ‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | (0.26) | (0.25) | (0.22) | (0.27) | ‡‡‡ | ‡‡‡ | ‡‡‡ |
Capex/Sh
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 1.18 | 1.09 | 1.23 | 1.04 | — | — | — |
Free CF/Sh
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 0.33 | 0.83 | 1.30 | 1.45 | ‡‡‡‡‡ | — | — |
Book Value/Sh
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 514.71 | 515.72 | 517.52 | 520.51 | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ |
Shares
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡ | ‡‡‡‡‡ | 21.90 | 38.38 | 37.71 | 48.66 | ‡‡‡‡ | ‡‡‡‡ | ‡‡‡‡ |
PE Ratio
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 2.02 | 2.66 | 2.52 | 2.64 | ‡‡‡ | ‡‡‡ | ‡‡‡ |
PS Ratio
|
| ‡‡‡ | ‡‡‡ | ‡‡‡ | ‡‡‡ | ‡‡‡ | ‡‡‡‡‡ | 71.11 | 37.29 | 24.00 | 23.42 | ‡‡‡ | ‡‡‡ | ‡‡‡ |
PB Ratio
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 2.56 | 3.21 | 3.04 | 3.22 | ‡‡‡‡ | ‡‡‡‡ | ‡‡‡‡ |
EV/Sales
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 24.93 | 34.64 | 30.66 | 40.08 | — | — | — |
EV/FCF
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 742.00 | 687.00 | 754.00 | 678.00 | ‡‡‡ | ‡‡‡ | ‡‡‡ |
Op' Cash Flow
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | (135.00) | (127.00) | (116.00) | (139.00) | ‡‡‡‡‡ | ‡‡‡‡‡ | — |
Capex
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 607.00 | 560.00 | 638.00 | 539.00 | ‡‡‡‡‡ | — | — |
FCF
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | (1,229.00) | (1,137.00) | (1,254.00) | (1,431.00) | — | — | — |
Working Cap'
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 3,772.00 | 4,005.00 | 4,014.00 | 4,365.00 | — | — | — |
Total Debt
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 3,188.00 | 3,364.00 | 3,320.00 | 3,833.00 | — | — | — |
Net Debt
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 168.00 | 430.00 | 675.00 | 757.00 | — | — | — |
Sh' Equity
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 7.33% | 5.25% | 4.92% | 3.85% | ‡‡‡‡‡ | — | — |
ROA
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 13.30% | 13.01% | 12.88% | 9.45% | — | — | — |
ROIC
|
| ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | ‡‡‡‡‡ | 514.95% | 143.81% | 78.73% | 50.98% | ‡‡‡‡‡ | — | — |
ROE
|
Warner Music Group (WMG) has shown resilient revenue growth in a streaming-dominated music industry, surging from $3.25 billion in 2016 to $6.04 billion in 2023 (9% CAGR), fueled by catalog hits from artists like Ed Sheeran and Cardi B, plus strategic moves like the $360 million Dance/Warner acquisition. Profitability has rebounded sharply from a $470 million loss in 2020 to $478 million net income in 2024, with EPS forecasted to jump 60% to $1.33 by 2026 and free cash flow hitting $638 million last year. Efficiency gains shine through, with revenue per employee up 52% to $1.11 million and ROIC peaking at 12.9%, though negative working capital signals heavy content investments.
Despite ballooning debt to $4.36 billion by 2025, WMG’s balance sheet is strengthening, with equity turning positive and ROA projected to double to 8.8%. Valuation looks compelling—stock near annual lows, trading at a discount to analyst targets (up to 56% upside), P/E compressing to 22x forward, and recent insider buys by the CFO and a director totaling ~$2 million underscoring confidence. EV/FCF at 30.7x reflects growth potential amid stable PS ratios.
Analysts project revenue accelerating to $7.99 billion by 2028 (10%+ CAGR) in a $28 billion+ market, driven by AI personalization, emerging regions, and non-recorded streams, potentially doubling net income and delivering 15-20% annualized returns. Risks like streaming regulations, AI lawsuits, and artist concentration loom, but WMG’s tech investments and execution could unlock significant value—read the full analysis for the deep dive.
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