It has been a great week for Tencent Music Leisure Group (NYSE:TME) shareholders, as a result of the corporate has simply launched its newest third-quarter outcomes, and the shares gained 4.7% to US$15.99. It appears to be like like a reputable end result general – though revenues of CN¥7.6b have been according to what the analysts predicted, Tencent Music Leisure Group stunned by delivering a statutory revenue of CN¥0.67 per share, a notable 17% above expectations. The analysts usually replace their forecasts at every earnings report, and we will choose from their estimates whether or not their view of the corporate has modified or if there are any new issues to concentrate on. So we gathered the newest post-earnings forecasts to see what estimates recommend is in retailer for subsequent yr.

See our newest evaluation for Tencent Music Leisure Group

earnings-and-revenue-growth

Following the newest outcomes, Tencent Music Leisure Group’s 22 analysts are actually forecasting revenues of CN¥35.4b in 2021. This might be a considerable 26% enchancment in gross sales in comparison with the final 12 months. Statutory earnings per share are predicted to surge 33% to CN¥3.20. Earlier than this earnings report, the analysts had been forecasting revenues of CN¥35.7b and earnings per share (EPS) of CN¥3.16 in 2021. So it is fairly clear that, though the analysts have up to date their estimates, there’s been no main change in expectations for the enterprise following the newest outcomes.

The analysts reconfirmed their value goal of CN¥122, exhibiting that the enterprise is executing effectively and according to expectations. It is also instructive to have a look at the vary of analyst estimates, to judge how completely different the outlier opinions are from the imply. At the moment, essentially the most bullish analyst values Tencent Music Leisure Group at CN¥20.55 per share, whereas essentially the most bearish costs it at CN¥14.80. With such a slim vary of valuations, the analysts apparently share comparable views on what they assume the enterprise is price.

Story continues

One technique to get extra context on these forecasts is to have a look at how they evaluate to each previous efficiency, and the way different corporations in the identical business are performing. It is fairly clear that there’s an expectation that Tencent Music Leisure Group’s income progress will decelerate considerably, with revenues subsequent yr anticipated to develop 26%, in comparison with a historic progress fee of 33% over the previous three years. Juxtapose this towards the opposite corporations within the business with analyst protection, that are forecast to develop their revenues (in combination) 15% subsequent yr. So it is fairly clear that, whereas Tencent Music Leisure Group’s income progress is anticipated to sluggish, it is nonetheless anticipated to develop quicker than the business itself.

The Backside Line

Crucial factor to remove is that there is been no main change in sentiment, with the analysts reconfirming that the enterprise is performing according to their earlier earnings per share estimates. Fortuitously, in addition they reconfirmed their income numbers, suggesting gross sales are monitoring according to expectations – and our information means that revenues are anticipated to develop quicker than the broader business. There was no actual change to the consensus value goal, suggesting that the intrinsic worth of the enterprise has not undergone any main adjustments with the newest estimates.

Following on from that line of thought, we expect that the long-term prospects of the enterprise are rather more related than subsequent yr’s earnings. Now we have forecasts for Tencent Music Leisure Group going out to 2024, and you’ll see them free on our platform right here.

It is usually price noting that we now have discovered 1 warning signal for Tencent Music Leisure Group that it’s essential to take into accounts.

This text by Merely Wall St is normal in nature. It doesn’t represent a suggestion to purchase or promote any inventory, and doesn’t take account of your goals, or your monetary state of affairs. We intention to carry you long-term targeted evaluation pushed by elementary information. Notice that our evaluation might not issue within the newest price-sensitive firm bulletins or qualitative materials. Merely Wall St has no place in any shares talked about.

Have suggestions on this text? Involved in regards to the content material? Get in contact with us straight. Alternatively, electronic mail editorial-team@simplywallst.com.