Universal Music Group: Valuation Has Gotten Cheaper While Fundamentals Have Improved

Eleceed Capital676 FollowersFollow5ShareSavePlay(7min)CommentsSummaryUniversal Music Group remains a buy as Streaming 2.0 agreements are materializing, positioning the company for renewed earnings growth.Core subscription revenue growth is robust, with over 8% growth for six consecutive quarters, even before Streaming 2.0 benefits fully materialize.The Downtown acquisition broadens UMGNF’s growth story, expanding reach to over 5,000 business clients and 4 million creators, diversifying revenue streams.AI-related risks to UMGNF’s economics appear minimal for now, with negligible consumer engagement and no material impact on unit economics or catalog value.Klaus Vedfelt/DigitalVision via Getty Images Summary I gave a buy rating to Universal Music Group (UMGNF) previously in August, as the long-term upside had improved. Back then, underlying fundamentals were sound: subscription revenue growth remained healthy, ad-supported demand was also good, and music publishingThis article was written byEleceed Capital676 FollowersFollowI'm a passionate investor with a strong foundation in fundamental analysis and a keen eye for identifying undervalued companies with long-term growth potential. My investment approach is a blend of value investing principles and a focus on long-term growth. I believe in buying quality companies at a discount to their intrinsic value and holding them for the long haul, allowing them to compound their earnings and shareholder returns.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.