Warner Music is the third-largest of the three major record companies. Recorded music accounts for most of the firm's revenue, with the segment housing notable record labels including Atlantic Records, Warner Records, Elektra Records.
It is a $15.0B consumer company. Revenue grew 12.9% over the last year, it keeps 9¢ of every dollar of sales as profit, and its net debt equals ~4.2 years of free cash flow. It trades at 23.0× earnings — near the lowest of its own history.
- Website
- wmg.com
- Location
- New York, NY
- Employees
- 5 500
- Sector
- Consumer Cyclical
- Founded
- 1967
Skills
Six independent scores, 0–100, built from reported numbers and valuation history. Click a row to see how it was scored.
Strong valuation and quality; Growth and Health lag behind.
Valuation85
- P/E vs own history5th pct · 25/25
- FCF yield5.6% · 20/25
- P/S2.1x · 20/25
- EV/EBITDA13.9x · 20/25
Growth49
- Revenue CAGR6.1% · 12/25
- Net income CAGR4.7% · 6/25
- EPS CAGR ~5Y4.3% · 6/25
- Fwd implied growth49.8% · 25/25
Profitability62
- ROIC8.7% · 12/25
- ROE90.8% · 25/25
- Net margin9.2% · 13/25
- Operating margin13.6% · 12/25
Health24
- Altman Z1.44 · 3/25
- Current ratio0.73 · 6/25
- Interest coverage4.6x · 10/25
- Net cash / debtD/A 36% · 5/25
Quality85
- Piotroski F5/9 · 15/25
- Beneish M-2.54 · 25/25
- FCF conversion124% · 25/25
- Margin stabilityσ 5.2% · 20/25
Moat58
- ROIC >12% years6/10 yrs · 13/25
- Median gross margin47.4% · 20/25
- FCF-positive years10/10 yrs · 25/25
- Worst-year net marginworst -10.6% · 0/25
Experience
The company's career so far — founding, the IPO, landmark products and acquisitions, plus revenue milestones and insider buying.
- FY2022FinancialBest year on record$551M net income
- 2021AcquisitionWMG purchased a minority stake in the Saudi Arabian record label Rotana Records
- FY2016FinancialFirst recorded profitable year$25.0M net income
- FY2016FinancialRevenue already above $1B$3.25B in first reported year
- FY2016FinancialPositive free cash flow every year since10-year streak
- 2014AcquisitionWMG announced that it had acquired Chinese record label Gold Typhoon
- 2004AcquisitionTransition to independent ownership, WMG hired record industry heavyweight Lyor Cohen from Universal…
- 1994AcquisitionCanadian beverage giant Seagram bought a 14.5% stake in Time Warner
- 1992AcquisitionAlso in 1992, the Rhino Records label signed a distribution agreement with Atlantic Records and Time Warner…
- 1972MilestoneDue to a financial scandal involving price fixing in its parking operations, Kinney National spun off its…
- 1972AcquisitionThe Warner group acquired another rich prize, David Geffen's Asylum Records
- 1967Founded(forming Warner Bros.-Seven Arts), it purchased…
- 1963AcquisitionWarner purchased Reprise Records, which had been founded by Frank Sinatra three years earlier so that he…
- 1958ProductRecords was created in 1958; its original office was located above the film studio's machine shop on 3701 Warner…
Achievements
Verifiable track record, straight from the reported numbers.
Strengths & watch-outs
What a bull and a bear would each point to. Both lists come from the reported numbers, not opinions.
Strengths
- High gross margin (45.8%)
- Revenue growing 12.9% year over year
Watch-outs
- Altman Z-Score 1.44 — elevated financial-distress risk
- Net debt would take ~5.1 years of free cash flow to repay
- Loss-making in 1 of the recent years
Qualifications
The basics a company should meet before you research it further. Each check uses the reported numbers.
- Revenue growing — the company sells more than a year ago+12.9% YoY
- Profitable — makes more than it spends$672M TTM
- Profit growing — earnings are higher than last year-13.2% YoY
- Generates cash — cash left after running and investing$836M TTM
- Debt under control — could handle its obligations~4.2y of cash flow to repay
- Established company — not a micro-cap — lower blow-up risk$15.0B market cap
- Not printing shares — share count not ballooning — you keep your slice+1.4% shares over ~5y
- Proven track record — years of profitability behind it9/10 profitable years
- Financially stable — balance sheet not near distressAltman Z 1.4 — distress
- Pays a dividend — returns cash to shareholdersyield 2.59%
- Valuation not extreme — price not wildly above earningsP/E 23.0
Peer comparisonWarner Music Group Corp. vs 6 largest consumer cyclical peers — cap, P/E, growth and margin side by sideOpen ▾Close ▴
| Company | Market cap | P/E | Revenue growth | Net margin | Profile |
|---|---|---|---|---|---|
| WMG this company | $15.0B | 23.0 | +12.9% | 9.2% | Strained |
| AMZN Amazon.Com Inc | $2.8T | 20.9 | +15.8% | 17.4% | Mixed |
| TSLA Tesla, Inc. | $1.5T | 397.1 | +11.8% | 3.7% | Strong |
| NFLX NetFlix Inc | $292.8B | 21.4 | +16.0% | 28.2% | Solid |
| HD Home Depot, Inc. | $290.4B | 20.4 | -16.0% | 8.7% | Solid |
| DIS The Walt Disney Company | $186.5B | 21.7 | +4.6% | 8.7% | Solid |
| MCD McDonald's Corporation | $166.9B | 18.9 | +6.3% | 31.7% | Strained |
Head-to-head: WMG vs AMZN · WMG vs TSLA · WMG vs NFLX
References
What covering analysts publish about the company — information only, not a recommendation.
Appendix · Financial records
The full statements behind this CV, FY2016–FY2025. For readers who want to check the numbers.
Live data and quarterly detail: stockcv.com/WMG
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Deeper analysis of WMG on PreMarketPriceFigures are derived from company filings (quarterly values normalised from as-filed year-to-date data where applicable) and may be delayed, restated or incomplete. This page is information, not investment advice. Latest price $28.72 · market cap $15.0B.