UMG
Universal Music Group
Content / Subscription
★ Quality 22/100Price today
$18.46
what the market pays
Worth
$25.38
calculated cycle value
Price is 27% below its value
charlieapp.co
Price vs Intrinsic Value
The line is the price month by month; the green band marks when it's undervalued (−20% off value). When the price drops in there, the discount is real, not opinion.
Where does the value come from?
Content and entertainment
$27.02
per share
How it's calculated
Anchor EV/EBITDA (perpetual catalogs). EBITDA €2.81B × 14x - net debt = IV $25.38. Ackman offer (Apr 7): ~€30.45/share (~20x EBITDA, non-binding, requires Tencent/Vivendi). Streaming 2.0 + AI licensing not yet captured. ND 3.4x FCF = 0.9x EBITDA (manageable). BARGAIN <$20.30. Long-term AI risk to human artists.
Net cash in the bank
cash minus financial debt, per share
Total calculated value
business + cash
How many times the cash flow
Content / Subscription · vs 6 peers
You pay 17.7x times this business's cash flow; its sector median is 17.6x.
34% below what Charlie thinks it's worth (23.8x) — that gap is your safety margin.
Why Undervalued?
Its free cash flow is $1.13/share × 13.2x multiplier minus $1.64 in negative net cash = $25.38 in intrinsic value. Today's price of $18.46 is 38% below that value — there's a real safety margin to enter.
The price is 27% below the calculated value. There's a real safety margin.
The model asks for a discount to absorb estimate errors. That cushion is here.
If the business disappoints a little, the price should hold near $20.30.
At what price would buying make sense?
Entry zones
🟢 Undervalued
≤$20.30
-20% off Value
🟡 Discounted
≤$24.11
-5% off Value
🟢 Today
$18.46
+38% Valor
Undervalued
Today's price offers a real discount to the calculated value. For the long run, this is the kind of entry that builds wealth.
“Price is what you pay. Value is what you get.”
— Warren Buffett
Model updated · July 2026
The business
UMG collects eternal rent on songs it paid for half a century ago.
Universal Music Group is the world's largest record label: it owns and licenses the catalogs of Taylor Swift, The Beatles, Drake, and thousands more. It gets paid every time they play on Spotify, Apple, or in an ad — a perpetual toll on music it paid for decades ago. Three-quarters of revenue comes from recordings; the rest from publishing and merchandising.
Catalogs are assets that never expire: a 1970 song keeps generating royalties every year with no reinvestment. Three labels control ~70% of the global market, and no streaming platform can offer a credible service without licensing from UMG. Replicating half a century of rights is impossible; buying them costs a fortune.
Revenue history
From $11.2B to $14.7B in 4 years. The business grows steadily.
Catalysts and risks
Ackman/Pershing offer of April 7: ~€30.45/share, ~20x EBITDA. Non-binding, requires Tencent and Vivendi.
'Streaming 2.0': premium tiers and rising ARPU — not yet reflected in the model.
AI licensing: deals with generative platforms as a new royalty line since 2025.
Generative AI: synthetic music with no royalties erodes the value of the human catalog long term.
Streaming concentration: Spotify and Apple negotiate rates and squeeze margins.
Net debt 3.4x FCF; manageable today, uncomfortable if cost of capital rises.
Charlie's note
“A perpetual toll on half a century of impossible-to-replicate catalogs at 13.2x is a sensible price for a moat of this caliber; 8% growth and 23% gross margin don't dazzle, but the asset doesn't expire and the oligopoly holds. Here discipline pays: wait for your multiple without chasing.”
Analysis · June 2026
So when would be a good price for Universal Music Group?
Today it trades below what we calculate. If you want us to tell you when that changes —or when the value itself moves because the company reported— we will email you.
🔔 Email meFree · no card
Charlie informs, it doesn't advise. No information should be taken as a recommendation to buy or sell.