Shares of Warner Music Group Corp. (NASDAQ:WMG) surged 15.2% yesterday on the announcement of better-than-expected fourth-quarter results. WMG’s quarterly revenue rose 9% year-over-year to $1.50 billion and outpaced Street estimates of $1.41 billion. Similarly, diluted earnings of $0.28 per share handily beat the analyst consensus of $0.13 per share. Warner Music Group had reported diluted earnings of $0.05 per share in the prior-year period.
The company’s quarterly revenue was boosted by a 7% rise in Digital revenue. Also, adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) improved 16% year-over-year to $276 million, aided by strong operating performance, $29 million from the Copyright Settlement, and the impact of exchange rates.
For full year Fiscal 2022, Warner Music Group posted diluted earnings of $1.06 per share, almost double the FY21 figure of $0.58 per share. Meanwhile, its revenue of $5.92 billion showed growth of 12% annually.
Steve Cooper, CEO of WMG, said, “Against the backdrop of a challenging macro environment, we once again proved music’s resilience, with new commercial opportunities emerging all the time. We’re very well positioned for long-term creative success, and continued top and bottom-line growth.”
Is Warner Music Group Stock a Good Buy?
Going by the company’s solid quarterly performance in a difficult macro backdrop, WMG stock seems like a good stock. Further, currently, the stock is trading at a huge discount from its 52-week high of $44.64, implying room to grow. Additionally, WMG pays a regular quarterly common dividend of $0.16 per share, reflecting a healthy dividend yield of 2.23%.
On TipRanks, WMG stock has a Moderate Buy consensus rating based on eight Buys, two Holds, and one Sell. The average Warner Music Group price forecast of $32.27 implies 3.8% upside potential to current levels. At the same time, the stock has gained 7.8% in the past six months.
