Tencent Music Entertainment Group (NYSE:TME) Shares Gap Down - Should You Sell?

Key Points

• Tencent Music shares gapped down sharply, opening at $8.63 versus a prior close of $9.90, and last traded around $8.93 on volume of roughly 7 million shares.
• Analyst sentiment is mixed but averages to “Hold”: six analysts rate the stock Buy and eight rate it Hold. The consensus price target is $21.44, although JPMorgan and Mizuho recently reduced their targets to $10 and $18, respectively.
• The company reported quarterly EPS of $0.25 on $1.31 billion in revenue, with a 26.45% net margin and low debt-to-equity of 0.06. Institutional investors own approximately 24.32% of the stock.

Tencent Music Entertainment Group Sponsored ADR (NYSE:TME - Get Free Report) gapped down before the market opened on Tuesday . The stock had previously closed at $9.90, but opened at $8.63. Tencent Music Entertainment Group shares last traded at $8.9250, with a volume of 7,018,044 shares changing hands.

Analysts Set New Price Targets

A number of equities research analysts have issued reports on TME shares. JPMorgan Chase & Co. decreased their price objective on Tencent Music Entertainment Group from $12.00 to $10.00 and set a "neutral" rating on the stock in a research report on Thursday, May 14th. Weiss Ratings raised shares of Tencent Music Entertainment Group from a "hold (c-)" rating to a "hold (c)" rating in a report on Wednesday, July 1st. Zacks Research raised shares of Tencent Music Entertainment Group from a "strong sell" rating to a "hold" rating in a research note on Tuesday, May 19th. Finally, Mizuho lowered their target price on Tencent Music Entertainment Group from $23.00 to $18.00 and set an "outperform" rating for the company in a report on Wednesday, May 13th. Six research analysts have rated the stock with a Buy rating and eight have issued a Hold rating to the company's stock. Based on data from MarketBeat, Tencent Music Entertainment Group has an average rating of "Hold" and a consensus target price of $21.44.

Tencent Music Entertainment Group Price Performance

The company has a current ratio of 2.09, a quick ratio of 2.08 and a debt-to-equity ratio of 0.06. The stock has a 50-day moving average price of $9.00 and a 200 day moving average price of $10.91. The stock has a market capitalization of $13.79 billion, a price-to-earnings ratio of 11.02, a PEG ratio of 0.63 and a beta of 0.84.

Tencent Music Entertainment Group (NYSE:TME - Get Free Report) last issued its quarterly earnings results on Tuesday, June 30th. The company reported $0.25 earnings per share (EPS) for the quarter. The company had revenue of $1.31 billion for the quarter. Tencent Music Entertainment Group had a return on equity of 11.20% and a net margin of 26.45%. As a group, equities research analysts expect that Tencent Music Entertainment Group Sponsored ADR will post 0.89 earnings per share for the current year.

Institutional Trading of Tencent Music Entertainment Group

A number of institutional investors and hedge funds have recently modified their holdings of the stock. Allworth Financial LP lifted its stake in Tencent Music Entertainment Group by 63.2% in the 3rd quarter. Allworth Financial LP now owns 1,480 shares of the company's stock valued at $35,000 after buying an additional 573 shares in the last quarter. Caitong International Asset Management Co. Ltd raised its holdings in shares of Tencent Music Entertainment Group by 5,777.1% during the fourth quarter. Caitong International Asset Management Co. Ltd now owns 2,057 shares of the company's stock valued at $36,000 after acquiring an additional 2,022 shares during the last quarter. Smartleaf Asset Management LLC raised its holdings in shares of Tencent Music Entertainment Group by 61.3% during the fourth quarter. Smartleaf Asset Management LLC now owns 2,123 shares of the company's stock valued at $37,000 after acquiring an additional 807 shares during the last quarter. Kestra Advisory Services LLC purchased a new position in shares of Tencent Music Entertainment Group in the fourth quarter valued at approximately $46,000. Finally, EverSource Wealth Advisors LLC boosted its stake in shares of Tencent Music Entertainment Group by 83.0% in the second quarter. EverSource Wealth Advisors LLC now owns 3,005 shares of the company's stock worth $59,000 after acquiring an additional 1,363 shares during the last quarter. Hedge funds and other institutional investors own 24.32% of the company's stock.

Tencent Music Entertainment Group Company Profile

Tencent Music Entertainment Group NYSE: TME is a China-based digital music and audio entertainment platform that operates a portfolio of leading music streaming and social entertainment services. Its core consumer-facing products include streaming apps, online karaoke (KTV) services and live music and entertainment broadcasts. The company monetizes its content through a mix of subscriptions, digital music sales, in-app purchases, virtual gifting, advertising and licensing arrangements with rights holders.

The company traces its roots to the consolidation of Tencent's music assets and was established in the mid-2010s to unify several prominent music properties under a single operating entity.

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