Massive earnings miss triggers selloff. Tencent Music Entertainment (NYSE: TME) reported Adjusted EPS of RMB1.60 (US$0.23) for Q4 2025, missing the consensus estimate of $1.59 by 85.6%. The stock plunged 23.8% on the news, erasing $6 billion in market value as the result shattered a four-quarter streak of beats. The adjusted earnings figure came in well below even the most pessimistic analyst forecast of $1.48, signaling a fundamental breakdown in the business model that Wall Street failed to anticipate.
Revenue collapses alongside earnings. Q4 revenue of $1.24 billion fell dramatically short of the $8.30 billion consensus, missing by 85.1%. The revenue figure represents an 83.4% decline from year-ago levels, a stunning reversal for a company that had posted steady growth through the first three quarters of 2025. Net income of $2.48 billion appears disconnected from the operating performance, suggesting significant one-time gains or accounting adjustments that masked underlying weakness. Operating income of $406 million on gross profit of $556.5 million points to a 32.7% operating margin, but the revenue shortfall raises questions about user engagement, pricing power, or competitive pressures in China’s music streaming market.
Analyst confidence evaporates. The Wall Street consensus heading into the quarter showed 27 Buy or Strong Buy ratings against just 3 Holds, reflecting near-universal optimism that now looks badly misplaced. The magnitude of the miss—with actual results landing 85.6% below estimates across both EPS and revenue—suggests either a material business disruption or a significant change in accounting treatment that analysts failed to model. With four analysts covering the stock and estimates ranging from $1.48 to $1.64 per share, the entire range proved irrelevant.
This article was generated using AlphaStreet’s proprietary financial analysis technology and reviewed by our editorial team.
The post Tencent Music (TME) Crashes 24% as Q4 EPS Misses by 85.6%, Revenue Plunges 83.4% YoY to $1.24B first appeared on Alphastreet.
