# Warner Music Group Corp. Class A Common Stock (WMG) — Stock CV

Warner Music Group Corp. 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.

> 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.

## Identity

- **Ticker**: WMG
- **Sector**: Consumer Cyclical
- **Industry**: Services-Amusement & Recreation Services
- **Headquarters**: NEW YORK, NY
- **Employees**: 5 500
- **Website**: https://www.wmg.com
- **Market cap**: $15.0B
- **Last price**: $28.72
- **Financial profile**: Strained

## Vitals (TTM)

- **Revenue**: $7.30B
- **Net income**: $672M
- **Free cash flow**: $836M
- **Net debt**: $3.53B
- **P/E**: 23.0
- **Revenue growth (YoY)**: 12.9%

## Skills (profile scores, 0–100)

| Pillar | Score |
|---|---|
| Valuation | 85 |
| Growth | 49 |
| Profitability | 62 |
| Health | 24 |
| Quality | 85 |
| Moat | 58 |

## Qualifications (beginner checklist) — 9 of 11 passed

- [x] Revenue growing — +12.9% YoY
- [x] Profitable — $672M TTM
- [ ] Profit growing — -13.2% YoY
- [x] Generates cash — $836M TTM
- [x] Debt under control — ~4.2y of cash flow to repay
- [x] Established company — $15.0B market cap
- [x] Not printing shares — +1.4% shares over ~5y
- [x] Proven track record — 9/10 profitable years
- [ ] Financially stable — Altman Z 1.4 — distress
- [x] Pays a dividend — yield 2.59%
- [x] Valuation not extreme — P/E 23.0

## Experience (career milestones)

- **FY2022** — Best year on record: $551M net income
- **2021** — WMG purchased a minority stake in the Saudi Arabian record label Rotana Records
- **FY2016** — First recorded profitable year: $25.0M net income
- **FY2016** — Revenue already above $1B: $3.25B in first reported year
- **FY2016** — Positive free cash flow every year since: 10-year streak
- **2014** — WMG announced that it had acquired Chinese record label Gold Typhoon
- **2004** — Transition to independent ownership, WMG hired record industry heavyweight Lyor Cohen from Universal…
- **1994** — Canadian beverage giant Seagram bought a 14.5% stake in Time Warner
- **1992** — Also in 1992, the Rhino Records label signed a distribution agreement with Atlantic Records and Time Warner…
- **1972** — Due to a financial scandal involving price fixing in its parking operations, Kinney National spun off its…
- **1972** — The Warner group acquired another rich prize, David Geffen's Asylum Records
- **1967** — (forming Warner Bros.-Seven Arts), it purchased…
- **1963** — Warner purchased Reprise Records, which had been founded by Frank Sinatra three years earlier so that he…
- **1958** — Records was created in 1958; its original office was located above the film studio's machine shop on 3701 Warner…

## 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

## Track record

| Year | Revenue | Net income | Free cash flow |
|---|---|---|---|
| FY2021 | $5.30B | $304M | $545M |
| FY2022 | $5.92B | $551M | $607M |
| FY2023 | $6.04B | $430M | $560M |
| FY2024 | $6.43B | $435M | $638M |
| FY2025 | $6.71B | $365M | $539M |

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Source: https://stockcv.com/WMG — derived from company filings; may be delayed or incomplete. Information, not investment advice.