What Happened?
Shares of global music entertainment company Warner Music Group (NASDAQ: WMG) fell 8.2% in the afternoon session after the company reported weak first quarter 2025 results which saw a significant EPS miss and underperformance in Recorded Music revenue. Revenue declined modestly, with a 1.2% drop in Recorded Music sales, led by soft ad-supported streaming and weaker results in artist services and expanded rights, despite gains in licensing and physical formats. Overall, this was a weaker quarter.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Warner Music Group? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Warner Music Group’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 10.2% on the news that the company reported weak third-quarter 2024 earnings, which missed analysts' EPS estimates significantly. Its Sales in the Recorded Music business also fell short of Wall Street's estimates. Overall, this was a softer quarter.
Warner Music Group is down 11.3% since the beginning of the year, and at $27.77 per share, it is trading 23.5% below its 52-week high of $36.30 from February 2025. Investors who bought $1,000 worth of Warner Music Group’s shares at the IPO in June 2020 would now be looking at an investment worth $921.98.
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