This trade activity should not be overlooked: Tencent Music Entertainment Group (TME)

Tencent Music Entertainment Group (NYSE: TME) stock jumped 0.94% on Tuesday to $8.56 against a previous-day closing price of $8.48. With 3.4 million shares changed hands, the volume of the stock remained lighter than its average volume of 12.94 million shares. During the session, the Internet Content & Information company that operates in wider Communication Services sector, reached to the highest price of $8.64 whereas the lowest price it dropped to was $8.36. The 52-week range on TME shows that it touched its highest point at $9.29 and its lowest point at $2.95 during that stretch. It currently has a 1-year price target of $8.32. Beta for the stock currently stands at 0.78.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of TME was up-trending over the past week, with a rise of 0.82%, but this was up by 0.94% over a month. Three-month performance surged to 123.50% while six-month performance rose 87.31%. The stock gained 33.96% in the past year, while it has gained 3.38% so far this year. A look at the trailing 12-month EPS for TME yields 0.28 with Next year EPS estimates of 0.47. For the next quarter, that number is 0.13. This implies an EPS growth rate of -27.20% for this year and 9.30% for next year. EPS is expected to grow by 4.38% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 104.70%.

Float and Shares Shorts:

At present, 1.59 billion TME shares are outstanding with a float of 837.51 million shares on hand for trading. On Oct 13, 2022, short shares totaled 30.18 million, which was 1.78% higher than short shares on Sep 14, 2022. In addition to Mr. Kar Shun Pang as the firm’s Exec. Chairman, Mr. Zhu Liang serves as its CEO & Director.

Institutional Ownership:

Through their ownership of 49.07% of TME’s outstanding shares, institutional investors have minority control over the company. Other institutions hold 27.75% of TME, in contrast to 17.90% held by mutual funds. Shares owned by individuals account for –. As the largest shareholder in TME with 4.31% of the stake, Canada Pension Plan Investment Bo holds 36,993,022 shares worth 36,993,022. A second-largest stockholder of TME, Baillie Gifford & Co., holds 31,409,903 shares, controlling over 3.66% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in TME, holding 21,371,860 shares or 2.49% stake. With a 4.20% stake in TME, the Canada Pension Plan is the largest stakeholder. A total of 36,084,000 shares are owned by the mutual fund manager. The KraneShares CSI China Internet ET, which owns about 4.14% of TME stock, is the second-largest Mutual Fund holder. It holds 35,545,068 shares valued at 294.31 million. Stichting Pensioenfonds ABP holds 1.01% of the stake in TME, owning 8,632,759 shares worth 71.48 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for TME since 29 analysts follow the stock currently. There are 14 analysts who recommend BUY ratings, while 2 suggest SELL ratings. Of the remaining analysts, 8 believe that the stock is worth HOLDING, 5 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With TME analysts setting a high price target of $74.54 and a low target of $31.86, the average target price over the next 12 months is $57.84. Based on these targets, TME could surge 770.79% to reach the target high and rise by 272.2% to reach the target low. Reaching the average price target will result in a growth of 575.7% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. TME will report FY 2022 earnings on 03/19/2024. Analysts have provided yearly estimates in a range of $2.97 being high and $1.07 being low. For TME, this leads to a yearly average estimate of $2.30. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Tencent Music Entertainment Group surprised analysts by $0.01 when it reported $0.09 EPS against a consensus estimate of $0.09. The surprise factor in the prior quarter was $0.01. Based on analyst estimates, the high estimate for the next quarter is $0.91 and the low estimate is $0.61. The average estimate for the next quarter is thus $0.79.

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