Rankings Software, cloud & internet Universal Music Group
Universal Music Group
85
15070100
A view of the same findings, not a new score. How it works
A strong score: the model found few serious problems, but analysts see limited upside from here.
Biggest deductions
- Margin−4
- Debt and debt-funded payouts−4
- Quality of growth−3
Strengths
- Pricing power+2
- Hidden assets+1
How the score is built
From 100 to 85, step by step: points off for the business, the price and the cracks, back for documented strengths, then three data adjustments.
Start
Score
Hover or select a step to see what drove it. Steps with findings open them below.
Key numbers
As of 3 Nov 2026. Analyst targets tend to be optimistic; read upside as a hint, not a forecast.
- Price
- 16.89 EUR
- Median analyst target
- 20.00 EUR
- Upside to median
- +18.4%
- Analysts
- 21
- Target range
- 12.00 – 39.00 EUR
- 52-week change
- −27%
- P/E (trailing)
- 95.8
- Forward P/E
- 15.8
- PEG
- 1.19
Findings
Every deduction and every plus, with its source. Open a step to read them.
Business
Is the company getting stronger, not just bigger? · 3 findings−9 of −30
- −4MarginAdjusted EBITDA margin fell 1.3 pp to 21.5% in Q2 (excl. Downtown) because of an unfavourable mix, higher legal costs and losses in merchandise (−10.7%). The gross margin has fallen from 45.8% (2021) to 41.7% TTM.
- −3Quality of growthOrganic growth 6.4% in Q2, but subscription growth fell to 6.7% from 7.9% in Q1, and market share loss cost 1.5 pp – growth is driven by price increases (Streaming 2.0) and the Downtown acquisition (13.3% reported).
- −2ROIC and capital allocationROIC fell from 21.5–31.5% (2021–25) to 16.2% TTM. Downtown (EUR 806m in investment outlays) contributed EUR 288m in revenue, but only EUR 13m adjusted EBITDA in H1 (about 4.5% margin).
Price
Today's multiples against the company's own history and its peers. · 1 finding−2 of −35
- −2Multiples vs own history and peersForward P/E 14.0 vs 23.7–33.0 in 2021–25; EV/EBITDA 13.6 vs 19.6–32.7; P/FCF 16.9 vs 24–40. The lowest level since the IPO, but EPS is expected to fall 3% in 2026, and FCF under the new definition is weak (FCF yield about 5.4% on the 2026 estimate).
Cracks
Cash flow, customers, debt, insiders, guidance and what sits behind the headline numbers. · 3 findings−7 of −35
- −4Debt and debt-funded payoutsFinancial net debt rose from EUR 2.39bn to 4.13bn in six months (Downtown, buybacks of 734m, dividends of 514m), while H1 FCF was only EUR 24m (−85%). Current ratio 0.61, quick ratio 0.41 and Altman Z 0.24; buybacks are partly funded by selling Spotify shares.
- −2AI and legal costsGenerative AI music is a structural threat to catalogue values; UMG is betting on licensed AI deals (the Spotify collaboration), but needs a 'critical mass' of artists, and legal costs have risen and squeeze the margin.
- −1GovernanceInsiders/major shareholders (the Bolloré sphere) own about 19%, and the free float is 1.26bn of 1.81bn shares; analysts deeply disagree (targets from EUR 12.10 to 39), and the share has fallen 41% in a year.
Plus
Only documented strengths. · 2 findings+3 of +15
- +2Pricing powerStreaming 2.0 deals with Spotify, YouTube, Amazon and now Pandora gave a 3.5pp price contribution to subscription growth, and physical sales rose 16% in Q2; in India 72 hours of exclusivity is introduced for paying subscribers.
- +1Hidden assetsOnly about a third of the planned Spotify stake has been sold (EUR 403m gross), so about two thirds remain and can be realised to reduce debt.
Caveats
What the score does not capture, or where the data is weak.
Reported net profit fell 84.5% to EUR 222m in H1 due to fair value adjustments of listed equity holdings (incl. Spotify); adjusted net profit was 863m (−2.2%), so trailing P/E of 83 is misleading – T2 is based on forward/adjusted figures. stockanalysis shows no buybacks and +0.14% in share count, but the company bought own shares for EUR 734m in H1 – share count data are not used. UMG has changed its FCF definition (H1 FCF 24m vs 163m), while stockanalysis shows 1.57bn TTM (old method). Downtown consolidated from 20/2/2026. Price targets were cut after the 25% share price fall on 31/7 (e.g. Morgan Stanley 31→25, Goldman 19→15, HSBC 'reduce' 12.10), but several have not been updated – price targets are only included via the formulas. No industry on the list fits music/media; closest chosen (Software, cloud & internet, as earnings are mainly digital streaming). Pershing Square/US listing, EU terms for Downtown and lawsuits are not examined.
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