Is Warner Music Group Corp. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Warner Music Group Corp. has moved from fair to attractive, indicating a more favorable assessment of its stock. The company appears to be undervalued, especially when considering its P/E ratio of 19, which is lower than its peer CompoSecure, Inc. at 21.96, and its EV to EBITDA ratio of 12.53, which is more attractive compared to Cimpress Plc's 10.94. Additionally, Warner Music boasts a remarkable ROE of 129.12%, highlighting its efficient use of equity to generate profits.
In terms of peer comparison, Warner Music's valuation metrics suggest it is positioned favorably against its competitors, with a lower P/E ratio and a competitive EV to EBIT of 16.57. While the company's recent stock performance shows a 1-week return of 2.85%, compared to the S&P 500's 1.70%, it has underperformed over longer periods, such as a 3-year return of 37.82% versus the S&P 500's 81.19%. Overall, the current valuation metrics and the recent grade change suggest that Warner Music Group Corp. is an attractive investment opportunity.