Warner Music Group hasn't sung a happy tune since its IPO in mid-2020, but that may be about to change. The music licensing company, with operations in 70 countries, got an upgrade to its Relative Strength (RS) Rating to 77 Tuesday, up a dozen points from a 65 rating the day before. Warner Music stock is now just three points shy of the ideal RS Rating for a breakout.
The raised 77 RS Rating, out of 99, shows that Warner Music stock is beating 77% of all stocks on price performance. The best stocks to buy and watch typically have an RS Rating north of 80 in the early stages of their moves. See if Warner Music Group can continue to show renewed price strength and clear that threshold.
Warner Music Among Top 12% Overall
Warner Music stock has a strong 88 Composite Rating. IBD's Composite Rating is an amalgam of five key fundamental and technical metrics. Additionally, it carries an outstanding 96 Earnings Per Share Rating. Its C Accumulation/Distribution Rating, on an A+ to E scale, indicates that roughly as many institutional investors are buying shares as selling.
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Warner Music Group has moved more than 5% past a 29.59 entry in a first-stage cup with handle, meaning it's now out of a proper buy zone. Look for the stock to offer a new chance to get in like a three-weeks tight or pullback to the 50-day or 10-week line.
Earnings Growth Has Been Soaring
The New York-based company reported a huge 86% earnings jump to 80 cents per share last quarter, continuing a string of strong earnings reports. The prior two periods it reported 81% EPS growth then 154% growth. Perhaps due to intense competition in the streaming music market, sales have been weaker than earnings. Sales dipped 8% last quarter to $1.49 billion. The prior three periods it reported sales growth of 10%, 7% and 9%.
Warner Music stock holds the No. 8 rank among its peers in the Leisure-Services industry group. Hilton Grand Vacations and Life Time Group are among the group's highest-rated stocks.
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