Warner Music Group Corp. (WMG) AI Stock Analysis

Warner Music Group Corp. is a music entertainment company operating across the United States, the United Kingdom, Germany, and international markets. The company operates through two core segments: Recorded Music and Music Publishing. The Recorded Music segment discovers, develops, markets, distributes, and licenses music from artists under record labels such as Warner Records, Atlantic Records, and Sire Records. It monetizes catalogs via physical retail, online platforms, streaming, and download services. The Music Publishing segment owns and manages rights to approximately one million musical compositions from around 100,000 songwriters across various genres, while also administering soundtrack music for television and film productions.

Warner Music Group grew its annual revenue from $5.30B in FY2021 to $6.71B in FY2025, reflecting a 5-year revenue CAGR of 8.5%. However, annual revenue growth decelerated from 18.8% in FY2021 to 4.4% in FY2025, while gross margin declined from 48.3% to 45.8% over the same timeframe. Operating margin fell from 11.5% in FY2021 to 10.3% in FY2025, and net income decreased from $435.0M in FY2024 to $365.0M in FY2025. In the latest quarter ended June 30, 2026, growth rebounded, with quarterly revenue rising 10.4% year-over-year and quarterly earnings surging 393.1%. Over the trailing twelve months, revenue reached $7.30B with an operating margin of 16.7% and EPS of $1.25.

As of June 30, 2026, Warner Music Group held $618.0M in cash and short-term investments against total debt of $4.92B, resulting in net debt of $4.30B. Shareholders' equity was $854.0M, contributing to a high debt-to-equity ratio of 5.76 and a current ratio of 0.73. During FY2025, the company generated $678.0M in operating cash flow and $539.0M in free cash flow. Capital allocation in FY2025 included $139.0M in capital expenditures, $383.0M in dividends paid, and $16.0M directed toward share buybacks.

At $31.40 per share, Warner Music Group has a market capitalization of $16.43B and an enterprise value of $18.51B. The stock trades at a trailing P/E of 25.1x, higher than the 16.2x median of its US-listed Communication Services peers. Its forward P/E of 13.1x sits below the peer group median of 14.1x, while its enterprise value-to-EBITDA ratio of 12.6x is above the peer median of 10.0x. Over the past 1 year, the stock returned -0.8% compared to a 16.8% gain for the S&P 500, and its 5-year return of -25.5% lagged the index return of 83.0%.

Warner Music Group offers a forward annual dividend of $0.80 per share, representing a dividend yield of 2.55% as of October 16, 2026. The company has paid dividends for 7 consecutive years and generated a 5-year annualized dividend growth rate of 25.3%. Its payout ratio stands at 41.0%, supported by $539.0M in free cash flow generated in FY2025.

Consensus coverage shows 11 Strong Buy, 3 Buy, and 3 Hold recommendations, with zero Sell or Strong Sell ratings. The mean price target of $38.00 represents 21.0% upside versus the last closing price of $31.40. For the fiscal year ending September 30, 2026, analysts estimate revenue of $7.34B and EPS of $1.78, indicating 45.7% earnings growth. The company beat EPS estimates in each of the last 4 quarters, and the next earnings date is November 19, 2026.

This page is an AI-written research summary of Warner Music Group Corp. (WMG). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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