Snap Inc. (SNAP) vs Tencent Music Entertainment Group Sponsored ADR (TME)

Snap Inc. and Tencent Music Entertainment Group Sponsored ADR are both Internet Content & Information companies. Snap Inc. is the larger, with a market value of $10.9B against $5.5B — 2.0× the size. Snap Inc. has negative trailing earnings, so its P/E is not meaningful; Tencent Music Entertainment Group Sponsored ADR trades at 10.4×. Tencent Music Entertainment Group Sponsored ADR grew revenue faster over the last twelve months: 17.8% against 12.7%. Tencent Music Entertainment Group Sponsored ADR has the higher net margin (26.4% vs −4.90%) and the higher return on invested capital (9.92% vs −7.22%). Across the 20 metrics below, Tencent Music Entertainment Group Sponsored ADR leads on 15 and Snap Inc. on 5.

Valuation

Metric SNAP TME Internet Content & Information median
P/E n/m 10.40 11.54
P/S 1.61 2.79 0.86
P/B 5.29 1.13 1.20
Price to free cash flow 14.67 13.45 9.63
EV/EBITDA n/m 7.39 8.68
EV/Sales 1.74 2.17 1.18
Earnings yield (2.94%) 9.62% (2.42%)
Free cash flow yield 6.82% 7.44% 2.27%

Profitability

Metric SNAP TME Internet Content & Information median
Gross margin 57.33% 44.34% 66.84%
Operating margin (5.10%) 29.41% (3.41%)
Net margin (4.90%) 26.37% (3.02%)
Free cash flow margin 11.11% 33.20% 1.75%
Return on equity (15.58%) 10.65% 0.00%
Return on assets (4.19%) 7.91% (0.36%)
Return on invested capital (7.22%) 9.92% 0.00%

Growth

Metric SNAP TME Internet Content & Information median
Revenue growth (TTM) 12.65% 17.81% 2.65%
EPS growth (last fiscal year) 35.71% 75.86% 34.45%
Revenue growth, 5-year CAGR 18.80% 1.62% 9.73%
Net income growth, 5-year CAGR 0.00% 20.63% 0.00%

Health

Metric SNAP TME Internet Content & Information median
Debt to equity 1.83 0.13 0.01
Current ratio 2.94 1.74 1.82
Net debt to EBITDA (1.65) (1.88) (0.48)

Dividend

Metric SNAP TME Internet Content & Information median
Dividend yield — 2.78% 1.07%
Payout ratio — 0.30 0.28

Size

Metric SNAP TME Internet Content & Information median
Market cap 10.89b 5.46b 318.52m

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