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TKO Group Holdings, Inc. (TKO)
NYSE:TKO
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TKO Group Holdings
(NYSE:TKO)
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Rating:62Neutral
Price Target:
$220.00
▼(-1.73% Downside)
Action:ReiteratedDate:02/26/26
The score is driven primarily by solid cash-flow strength but tempered by uneven earnings quality and rising leverage. The latest earnings call was a meaningful positive, with guidance implying strong 2026 growth and margin expansion backed by long-term media-rights and partnerships, while valuation (high P/E) and mostly neutral technicals limit the upside in the overall rating.
Positive Factors
Durable media-rights portfolio
Large, long‑dated media-rights contracts create recurring, high‑margin cash flows and revenue visibility. These multi-year deals reduce top-line cyclicality, support elevated EBITDA margins and provide predictable licensing income that underpins long-term investment and capital-return plans.
Strong free cash flow generation
Consistent, material free cash flow enables sustained dividends, buybacks and reinvestment without relying on equity issuance. High FCF and strong conversion of EBITDA support financial flexibility to fund growth initiatives, partnerships and capital returns while servicing elevated leverage.
Growing partnerships and content monetization
Accelerating partnership revenue diversifies monetization beyond media and ticketing, and scales with audience engagement. A rising partnerships target implies sustainable, incremental high‑margin revenue that can amplify EBITDA and offset live‑event timing volatility over the medium term.
Negative Factors
Rising leverage and debt burden
Higher leverage reduces financial flexibility and increases sensitivity to revenue or margin shocks. With near‑term cash‑tax and working‑capital headwinds, elevated net leverage constrains optionality for M&A or growth capex and increases refinancing and interest‑coverage risk if profitability weakens.
Volatile profitability and anomalous gross profit
Inconsistent earnings and a negative gross profit line suggest distortions or structural cost pressure that could undermine margin sustainability. This variability reduces forecasting reliability and raises the risk that EBITDA strength masks underlying cost or revenue recognition issues affecting long‑run cash generation.
Timing and one-time cash pressures
Significant timing and one‑off cash items make free cash flow lumpy and less predictable. Material working‑capital swings and back‑weighted media receipts increase near‑term funding needs, complicating leverage reduction and capital‑return targets and raising execution risk if partner payments or event receipts shift.
TKO Group Holdings (TKO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$43.67B
Dividend Yield1.07%
Average Volume (3M)799.22K
Price to Earnings (P/E)99.1
Beta (1Y)0.84
Revenue Growth56.31%
EPS GrowthN/A
CountryUS
Employees890
SectorCommunication Services
Sector Strength97
IndustryEntertainment
Share Statistics
EPS (TTM)-0.08
Shares Outstanding78,922,360
10 Day Avg. Volume673,171
30 Day Avg. Volume799,217
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)4.52
Price to Sales (P/S)3.57
P/FCF Ratio14.58
Enterprise Value/Market Cap0.50
Enterprise Value/Revenue4.57
Enterprise Value/Gross Profit9.21
Enterprise Value/Ebitda16.66
Forecast
1Y Price Target
$233.24Price Target Upside4.19% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering16
EPS Forecast (FY)6.02
Revenue Forecast (FY)$5.86B
TKO Group Holdings Business Overview & Revenue Model
Company DescriptionTKO Group Holdings, Inc. operates as a sports and entertainment company. It operates through four segments: Media and Content, Live Events, Sponsorships, and Consumer Products Licensing. The company produces live events, television programs, and long-form and short-form video content across various platforms, including broadcast, pay television, and streaming, as well as digital and social media across approximately 170 countries. It is involved in the merchandising of video games, apparel, equipment, trading cards, memorabilia, digital goods, and toys, as well as sale of travel packages and tickets. The company engages in the corporate sponsorships and advertising business, which offers sale of in-venue and in-broadcast advertising assets, content product integration, and digital impressions. TKO Group Holdings, Inc. is based in New York, New York. TKO Group Holdings, Inc. is a subsidiary of Endeavor Group Holdings, Inc.
How the Company Makes MoneyTKO generates revenue through multiple streams, including commissions from talent representation in sports and entertainment, ticket sales from live events, and licensing fees from multimedia rights. The company's partnerships with major sports organizations and entertainment companies further enhance its revenue potential. Additionally, TKO benefits from sponsorship deals and advertising revenues tied to its events and digital platforms, creating a robust financial model that capitalizes on the growing demand for live entertainment and sports content.
TKO Group Holdings Key Performance Indicators (KPIs)
Any
Media Rights and Content Revenue Breakdown
Analyzes income from media rights and content, highlighting the company's ability to monetize its content library and negotiate lucrative broadcast deals, crucial for sustained revenue growth.
Analyzes income from media rights and content, highlighting the company's ability to monetize its content library and negotiate lucrative broadcast deals, crucial for sustained revenue growth.
Data provided by:
The Fly
The FlyTKO Group Holdings Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call presents a broadly positive operational and financial narrative: management highlighted transformational media-rights deals, strong adjusted EBITDA growth (+47% YoY) and significant margin expansion, robust cash generation and aggressive capital returns (dividends doubled and sizable buybacks). Key growth levers—media rights, partnerships, live events and FIPs—are driving 2026 guidance that implies substantial step-up in revenue (~21%) and EBITDA (~43%). Offsetting items include a modest FY2025 revenue decline (-3%) largely attributable to timing, a weaker IMG business (Q4 revenue -9% and negative EBITDA), one-time costs and timing-related cash flow volatility (World Cup distributions, antitrust settlement payments, White House event cost) and higher expected cash taxes in 2026. On balance, highlights materially outweigh the lowlights given the scale of recurring high-margin media deals, margin expansion and strong cash returns, supporting an overall positive outlook.Q4-2025 Updates
Positive Updates
Significant Media Rights Agreements
Secured landmark long-term media rights including UFC's $7.7 billion deal with Paramount and WWE's $1.6 billion deal with ESPN; company now has more than $15 billion of long-term media rights across UFC, WWE, PBR and Zuffa Boxing, providing high-margin, recurring revenue with annual escalators.
Strong Adjusted EBITDA Growth and Margin Expansion
Full-year 2025 adjusted EBITDA of $1.585 billion, up 47% year-over-year; adjusted EBITDA margin expanded to 33.5% (up ~11+ percentage points vs 2024). Guidance targets 2026 adjusted EBITDA of $2.24B–$2.29B, implying ~43% growth and margin expansion to ~39.6% at the midpoint (~600 basis points improvement).
Revenue and Q4 Operational Momentum
Fourth quarter 2025 revenue of $1.038 billion, up 12% YoY; Q4 adjusted EBITDA of $281 million, up 30% YoY, and Q4 adjusted EBITDA margin of 27% (up ~4 percentage points). Full-year revenue was $4.735 billion with management emphasizing 2026 revenue guidance of $5.675B–$5.775B (midpoint ~21% growth).
UFC and WWE Segment Strength
UFC Q4 revenue $401M (+17% YoY) and adjusted EBITDA $213M (+20%), with a 53% adj. EBITDA margin. WWE Q4 revenue $360M (+21% YoY) and adjusted EBITDA $165M (+44% YoY); WWE delivered >50% margin for the first time in 2025 and Q4 margin of 46% (up from 38%).
Partnerships and Content Engagement
Global partnerships revenue accelerated — UFC partnerships +39% to $93M in Q4; WWE partnerships +57% to $36M. WWE on Netflix streamed 525 million hours in the first year of the deal; UFC 324 on Paramount+ drove nearly 5 million streaming views (largest exclusive live event in Paramount+ history). Company raised 2030 partnerships target from $1.0B to $1.2B.
Robust Free Cash Flow and Capital Returns
Generated $1.159 billion of free cash flow in 2025 with free cash flow conversion of adjusted EBITDA at 73% (normalized conversion >60%). Returned meaningful capital: approximately $452M in dividends for the year and repurchased ~ $900M of Class A stock in 2025; announced intent to repurchase up to an additional $1B.
Live Events Demand and Monetization Levers
Strong live-event performance: Q4 sold out six UFC events and WWE achieved its highest-grossing arena date (John Cena farewell). Management expects to realize over $300M in aggregate value from financial incentive packages (FIPs) in 2026 (normalized ~ $240M) and targets $380M–$420M from FIPs by 2030.
Strategic Asset Integration and New Ventures
Integrated IMG and On Location to expand rights, production and hospitality capabilities (On Location delivered premium hospitality at 65+ events). Launched Zuffa Boxing with an initial Paramount+ media rights deal for U.S./Canada/Latin America and progressing toward earning additional equity tranches in the JV.
Negative Updates
Full-Year Revenue Decline
Full-year 2025 revenue decreased 3% to $4.735 billion (from $4.884 billion in 2024). Management attributed part of the year-over-year revenue decline to timing impacts including 2024 event mix (e.g., Paris Olympics timing effects).
IMG Segment Weakness
IMG Q4 revenue declined 9% to $248M and adjusted EBITDA was a loss of $4M (down $20M YoY), with adjusted EBITDA margin falling to negative 2% (from 6% prior), driven by the absence of the biennial Arabian Gulf Cup and timing variability.
Timing-Driven Live Events Revenue Pressures
WWE live events and hospitality revenue decreased 27% in Q4 to $68M due to timing shifts (fewer PLE nights and Saudi event timing moved into January 2026). Q1 2026 also lacks a comparable Saudi Fight Night that benefited Q1 2025.
One-Time and Timing Cash Impacts on Free Cash Flow
2025 free cash flow included a favorable $297M net collection related to On Location for the 2026 FIFA World Cup and an unfavorable ~$300M (including $250M UFC antitrust settlement payments and professional fees). Management warns 2026 free cash flow will be impacted by World Cup net payments distribution and Paramount's back-weighted payment schedule (negative working capital impact).
White House Event Cost and Return Profile
Planned UFC event at the White House (June 14) expected to cost upwards of $60M; management expects to monetize roughly half via sellable inventory leaving an expected net loss in the neighborhood of ~$30M. Company frames this as a strategic, one-time investment for awareness rather than a profit-making event.
Tax and Cash-Tax Headwinds Expected in 2026
Management expects a significant year-over-year increase in taxable net income in 2026 (driven by higher adjusted EBITDA and absence of certain 2025 tax benefits), leading to higher cash tax payments at TKO PubCo and mandatory tax distributions from TKO OpCo.
Reputational/PR Noise Around Zuffa Boxing Signing
Signing Conor Benn for a one-off super fight (reported purse ~ $15M) generated public criticism and competitor commentary; management states the purse is covered by partner Sela and that the deal is for a single super fight, but the episode creates some short-term PR/peer friction risk.
Company Guidance
TKO guided full‑year 2026 revenue of $5.675–$5.775 billion and adjusted EBITDA of $2.24–$2.29 billion (midpoint implying ~21% revenue growth, ~43% EBITDA growth and a ~39.6% adjusted EBITDA margin — ~600 bps expansion vs. 2025), after 2025 results of $4.735B revenue and $1.585B adjusted EBITDA (33.5% margin) and Q4 results of $1.038B revenue/$281M adjusted EBITDA (27% margin). Key drivers cited include more than $15B of long‑term media rights (notably UFC’s $7.7B Paramount deal and WWE’s $1.6B ESPN deal), over $300M of aggregate financial incentive packages (FIPs) expected in 2026 (normalized ≈$240M) with a $380–$420M FIP target by 2030, partnerships exceeding $450M in 2025 and a raised 2030 partnerships target of $1.2B, plus expected World Cup contribution of ~$75M adjusted EBITDA and Milano Olympics revenue of ~ $170M. Capital and cash metrics highlighted: 2025 free cash flow $1.159B (73% conversion of adjusted EBITDA; normalized target >60%), year‑end net leverage 1.9x (net debt $2.952B / adj. EBITDA $1.585B), cash $831M + $355M restricted, dividends of ~$150M quarterly ($0.78/sh) / $452M for the year, ~ $900M repurchased in 2025 and intent to repurchase up to an additional $1B, and near‑term working‑capital and cash‑tax headwinds from the Paramount payment schedule and World Cup distributions. Strategic proof points cited include UFC 324’s ~5M streaming views and WWE’s 525M hours streamed on Netflix in year one.TKO Group Holdings Financial Statement Overview
Summary
Cash generation is a clear strength (2025 operating cash flow and free cash flow both ~ $1.29B; free cash flow up ~29%), but overall financial quality is held back by volatile profitability (loss in 2023, near breakeven in 2024) and the unusual 2025 negative gross profit despite solid EBITDA. Leverage has increased (debt-to-equity ~1.09 in 2025), adding risk.Income Statement
Revenue has scaled rapidly over the last several years, with strong growth in 2023–2025 (2025 annual revenue up ~9%). Profitability, however, is inconsistent: 2025 shows a healthy net margin (~11%), but 2024 was near breakeven and 2023 was a loss. A major red flag is 2025 reporting negative gross profit (implying costs exceeded revenue), which is unusual and raises questions about cost structure or one-time items, even though EBITDA margin remains solid (~19%). Overall: strong top-line trajectory and decent EBITDA, but volatile earnings quality and margin profile.58
Neutral
Balance Sheet
Leverage is meaningful and has risen recently, with debt-to-equity moving from ~0.74 (2023–2024) to ~1.09 in 2025 alongside higher total debt. Equity and assets are sizable, which helps, but returns to shareholders have been volatile—very strong in 2022, negative in 2023, negligible in 2024, and improved in 2025 (~14%). The balance sheet is workable, but the higher leverage and variability in profitability increase financial risk versus a more consistently profitable peer.54
Neutral
Cash Flow
Cash generation is a relative strength. Operating cash flow and free cash flow are strong in 2025 (both ~$1.29B) with robust free cash flow growth (~29%). Free cash flow has generally been positive each year and in 2025 it matches net income, suggesting earnings are well-supported by cash that year. The main weakness is that the company’s operating cash flow has not consistently covered debt at a high level (coverage below 1.0 in most years except 2022), which matters given rising leverage.73
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.74B | 2.80B | 1.67B | 1.14B | 1.10B |
| Gross Profit | 2.35B | 1.51B | 995.75M | 754.53M | 446.10M |
| EBITDA | 1.31B | 676.31M | 611.09M | 603.15M | 341.40M |
| Net Income | 195.40M | 9.41M | -35.23M | 387.27M | 177.41M |
Balance Sheet | |||||
| Total Assets | 15.50B | 12.70B | 12.69B | 3.58B | 4.30B |
| Cash, Cash Equivalents and Short-Term Investments | 831.10M | 525.56M | 235.84M | 180.57M | 874.69M |
| Total Debt | 4.06B | 3.04B | 3.03B | 2.78B | 2.85B |
| Total Liabilities | 6.25B | 3.98B | 3.84B | 3.00B | 3.04B |
| Stockholders Equity | 3.74B | 4.09B | 4.11B | 568.92M | 1.25B |
Cash Flow | |||||
| Free Cash Flow | 1.16B | 508.46M | 419.75M | 489.32M | 139.37M |
| Operating Cash Flow | 1.29B | 583.41M | 468.38M | 501.72M | 178.60M |
| Investing Cash Flow | -146.90M | -59.05M | 12.28M | -13.26M | -188.81M |
| Financing Cash Flow | -635.70M | -232.26M | -424.47M | -1.18B | -317.06M |
TKO Group Holdings Technical Analysis
Positive
223.87
Price Trends
207.96
Positive
198.54
Positive
187.47
Positive
Market Momentum
3.24
Negative
63.32
Neutral
75.94
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TKO, the sentiment is Positive. The current price of 223.87 is above the 20-day moving average (MA) of 209.34, above the 50-day MA of 207.96, and above the 200-day MA of 187.47, indicating a bullish trend. The MACD of 3.24 indicates Negative momentum. The RSI at 63.32 is Neutral, neither overbought nor oversold. The STOCH value of 75.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TKO.
TKO Group Holdings Risk Analysis
TKO Group Holdings disclosed 67 risk factors in its most recent earnings report. TKO Group Holdings reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TKO Group Holdings Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $22.93B | 13.56 | 16.87% | 0.75% | 14.91% | 9.30% | |
66 Neutral | $13.95B | 31.57 | 5.18% | 0.76% | -16.36% | 29.53% | |
62 Neutral | $43.67B | 99.11 | 4.99% | 1.07% | 56.31% | ― | |
62 Neutral | $69.86B | 98.15 | 1.36% | ― | -4.29% | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
59 Neutral | $37.68B | -690.25 | -24.68% | ― | 5.39% | 36.94% | |
59 Neutral | $14.94B | 49.44 | 47.75% | 2.47% | 4.37% | -16.22% |
* Communication Services Sector Average
TKO
TKO Group Holdings
223.87
77.92
53.39%
LYV
Live Nation Entertainment
162.14
19.88
13.97%
NWSA
News Corp
24.29
-3.98
-14.07%
FOXA
Fox
56.34
-0.15
-0.27%
WMG
Warner Music Group
28.60
-3.78
-11.68%
WBD
Warner Bros
28.17
17.15
155.63%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.