Warner Music Group Corp. (WMG) Stock Analysis
Warner Music Group Corp.
▾ What's in the 55/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). It excludes the Altman Z score, whose retained-earnings input this filer does not report separately. See the Financial Health section for the full balance-sheet read.
How to read WMG
We are not publishing an intrinsic value for this one — the section below says exactly why. Everything on this page that comes straight from the filings and the tape is still here; treat the missing valuation as a known gap, not as a verdict on the business.
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1
Reported earnings & margins ↓
What the company actually reported — unaffected by the valuation being held.
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Balance sheet & book value ↓
Assets, liabilities and equity as filed.
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Who's selling & betting against it ↓
Insider and short-interest behaviour needs no valuation model.
The share count we read for WMG looks wrong — common for multi-class / founder-controlled filers that report shares per share-class. That makes per-share figures (including intrinsic value) misleading, so we suppressed them. The company's total financials below are sound.
What to use instead: Lean on the totals — revenue, net income, cash flow — and the balance sheet. Multi-class share counts are being corrected; once fixed, the per-share valuation returns automatically.
This note is only about the single DCF fair-value number — WMG's full financial statements, health scores, and written analysis are all below.
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
The Z-score needs working capital, retained earnings, EBIT, sales and total assets from the latest balance sheet, and at least one of those isn't reported in machine-readable form here — common for foreign private issuers. We leave it blank rather than compute a distress verdict from an estimated input. It doesn't affect the reported figures in the financial tables below.
▾ The checks — what passed, what didn't (and what we couldn't measure)
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✓ Positive net incomeNet income $365.0M in FY2025.
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✓ Positive operating cash flowOperating cash flow $678.0M (was $754.0M the prior year).
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✓ Cash flow backs up reported profitOperating cash flow $678.0M vs net income $365.0M.
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✗ Return on assets improvingReturn on assets 3.7% vs 4.8% a year ago.Why this matters: Is the company squeezing more profit out of each dollar of assets than last year? Rising = getting more efficient; falling = the opposite.
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✗ Debt load (vs assets)Long-term debt is 44.4% of assets vs 43.8% a year ago ($4,365.0M of $9,829.0M assets).Why this matters: Rising debt relative to assets means more risk and more cash going to interest instead of shareholders. Falling debt is a sign of strengthening.
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✗ Short-term liquidity (current ratio)Current ratio 0.66x vs 0.68x a year ago — below 1.0, a caution flag.Why this matters: The current ratio compares assets it can turn to cash within a year against bills due within a year. Below 1.0 means it may struggle to cover near-term obligations.
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· Share count (dilution) (n/a — data not reported; not scored)
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· Pricing power (gross margin) (n/a — data not reported; not scored)
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✗ Sales per asset (asset turnover)Asset turnover 0.68x vs 0.70x a year ago.Why this matters: Asset turnover measures how much revenue each dollar of assets generates. Rising = more productive use of the asset base.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
A standard DCFDCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
Full explanation → valuation is not meaningful for Warner Music Group due to the unreliability of per-share values flagged in the health signals. While the company demonstrates consistent positive net income and operating cash flow, the market is likely focused on its consistent revenue growth and the durability of its music catalog assets. The number one quantifiable risk is its current ratio of 0.66, indicating current liabilities exceed liquid assets.
As of 3 months ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
- Growth rate of digital revenue streams
- Trends in long-term debt and interest expenses
- Improvements in the current ratio above 1.0
The trend, in plain numbers (FY2024 → FY2025, latest reported)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Revenue grew +4% to $6.71B.
- Free cash flow fell to $485.0M.
- Net income fell -16% to $365.0M.
Management & Leadership
Warner Music Group is led by CEO Robert Kyncl, who assumed the role in January 2023, succeeding Stephen Cooper. Len Blavatnik, through Access Industries, remains a significant figure as the company's owner.
What They Make
Warner Music Group is a global music entertainment company that discovers, develops, and markets recording artists and their music, and publishes musical compositions. Its primary customers are music consumers and licensees.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
What we use instead: earnings (P/E, EV/EBIT), book value (P/B) — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.
The market is likely pricing WMG based on its consistent revenue growth of 6.1% per year over four years and its track record of positive net income and operating cash flow, which suggests a stable, albeit growing, business. Investors are likely betting on the long-term value of its intellectual property and continued growth in music streaming, despite the rising long-term debt.
Business Model & Valuation
How They Make Money
The company funds itself through its positive operating cash flow, but long-term debt is rising from $3346M to $4365M.
Free Cash Flow DCF
Standard FCF DCF: positive free cash flow in a sector suited for cash-flow-based valuation.
Show advanced inputs
| Revenue Growth | 6.1% |
| Historical Fcf Growth | -0.8% |
| Sector Default | 8.0% |
| Best Estimate | 6.6% |
| Method | blend(70% revenue_cagr, 30% sector) |
| Growth Basis | total |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project content, subscriptions, advertising and licensing independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue is growing at 6.1%/yr over 4 years, and net income has been positive for 5/5 years.
Geography & Markets
Warner Music Group operates globally, with significant presence across North America, Europe, and Asia, reflecting the international nature of the music industry.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)35.2NeutralMomentum is balanced — neither overbought nor oversold.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BearishLine below signalThe fast trend is below the slow trend — short-term momentum is currently downward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (5 notes — click to expand/collapse)
Guardrail Notes (5)
- Shares from unknown — per-share values may be less accurate.
- Illiquidity discount 25% applied (small/micro-cap — harder to exit, demand a margin).
- Shares/market cap missing or defaulted; per-share valuation unreliable.
- Shares defaulted to 1; IV is NOT meaningful — treat as data-unavailable.
- DATA UNAVAILABLE: per-share values suppressed due to missing/unreliable shares data.
FINANCIALS
Financial Statements (5-year tables — click to expand)
From Warner Music Group Corp.'s SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 6.7B | 365.0M | — |
| 2024 | 6.4B | 435.0M | — |
| 2023 | 6.0B | 430.0M | — |
| 2022 | 5.9B | 551.0M | — |
| 2021 | 5.3B | 304.0M | — |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC & adj. | Free Cash Flow |
|---|---|---|---|---|
| 2025 | 678.0M | 139.0M | 54.0M | 485.0M |
| 2024 | 754.0M | 116.0M | 52.0M | 586.0M |
| 2023 | 687.0M | 127.0M | 49.0M | 511.0M |
| 2022 | 742.0M | 135.0M | 39.0M | 568.0M |
| 2021 | 638.0M | 93.0M | 45.0M | 500.0M |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 678.0M − 139.0M − 54.0M (SBC & adj.) = 485.0M. This is the same owner-earnings FCF definition the valuation model uses.
Balance Sheet
| Total Assets | 9.8B |
| Total Liabilities | 9.1B |
| Equity | 647.0M |
| Total Debt | 4.4B |
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