TKO Group Holdings (TKO) AI Stock Analysis

• Market Cap: $39.52B
• Dividend Yield: 1.07%
• Average Volume (3M): 794.13K
• Price to Earnings (P/E): 81.0
• Beta (1Y): 0.83
• Revenue Growth: 56.31%
• EPS Growth: N/A
• Country: US
• Employees: 890
• Sector: Communication Services
• Sector Strength: 97
• Industry: Entertainment
• EPS (TTM): 0.47
• Shares Outstanding: 78,922,360
• 10 Day Avg. Volume: 854,910
• 30 Day Avg. Volume: 794,134
• PEG Ratio: -9.61
• Price to Book (P/B): 2.83
• Price to Sales (P/S): 4.12
• P/FCF Ratio: 22.73
• Enterprise Value/Market Cap: 0.50
• Enterprise Value/Revenue: 4.57
• Enterprise Value/Gross Profit: 8.96
• Enterprise Value/Ebitda: 15.57
• 1Y Price Target: $228.43
• Price Target Upside: 12.76% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 5.62
• Revenue Forecast (FY): $6.08B

• Rating: 71 Outperform
• Price Target: $223.00 ▲(10.08% Upside)

TKO Group Holdings has a strong financial performance and positive earnings call, which are the most significant factors driving the score. However, the high valuation and technical indicators suggesting an overbought condition present potential risks. The corporate events add a positive sentiment, but the overall score reflects a balanced view of opportunities and challenges.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, enhancing long-term financial stability.

Media Rights Deals

Long-term media rights deals provide stable, recurring revenue streams, bolstering financial predictability and strategic positioning.

Cash Flow Generation

Robust cash flow generation supports operational sustainability and provides flexibility for strategic investments and debt management.

Negative Factors

UFC Revenue Decline

A decline in UFC revenue suggests potential challenges in maintaining event frequency, impacting overall profitability and growth.

Operational Challenges

Fluctuating margins indicate potential inefficiencies in operations, which could affect profitability and require strategic adjustments.

Past High Leverage

High past leverage can limit financial flexibility and increase risk, necessitating careful debt management to ensure long-term stability.

TKO Group Holdings Business Overview & Revenue Model

Company Description

TKO 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 Money

TKO 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 Financial Statement Overview

Summary

TKO Group Holdings demonstrates solid financial health with strong revenue growth and improved profitability. The balance sheet shows a more balanced leverage position, although past high leverage remains a consideration. Cash flow generation is robust, supporting operational sustainability. Overall, the company is on a positive trajectory, but attention to operational efficiency and leverage management is advisable.

Income Statement

TKO Group Holdings has shown strong revenue growth with an 11.25% increase in TTM, indicating positive momentum. The gross profit margin remains healthy at 52.19%, although it has decreased from previous years. The net profit margin has improved significantly to 5.41% in TTM from a low of 0.34% in 2024, reflecting better cost management. However, the EBIT and EBITDA margins have seen fluctuations, suggesting some operational challenges.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.72 in TTM, indicating a more balanced capital structure compared to previous years. However, the return on equity is relatively low at 5.09%, suggesting limited efficiency in generating returns from equity. The equity ratio is stable, reflecting a solid asset base, but the high leverage in earlier years poses a potential risk.

Cash Flow

TKO's cash flow performance is strong, with a 15.61% growth in free cash flow in TTM, indicating robust cash generation. The operating cash flow to net income ratio is healthy at 0.58, and the free cash flow to net income ratio is over 1, showing efficient cash conversion. These metrics highlight the company's ability to generate cash and sustain operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.34B	2.80B	1.67B	1.14B	1.10B	974.21M
Gross Profit	2.21B	1.51B	995.75M	754.53M	446.10M	382.11M
EBITDA	1.27B	676.31M	611.09M	603.15M	341.40M	292.90M
Net Income	228.76M	9.41M	-35.23M	387.27M	177.41M	131.77M
Balance Sheet
Total Assets	15.55B	12.70B	12.69B	3.58B	4.30B	1.32B
Cash, Cash Equivalents and Short-Term Investments	861.41M	525.56M	235.84M	180.57M	874.69M	593.40M
Total Debt	4.04B	3.04B	3.03B	2.78B	2.85B	719.96M
Total Liabilities	6.10B	3.98B	3.84B	3.00B	3.04B	934.89M
Stockholders Equity	3.82B	4.09B	4.11B	568.92M	1.25B	383.99M
Cash Flow
Free Cash Flow	994.50M	508.46M	419.75M	489.32M	139.37M	292.21M
Operating Cash Flow	1.03B	583.41M	468.38M	501.72M	178.60M	319.87M
Investing Cash Flow	-67.58M	-59.05M	12.28M	-13.26M	-188.81M	11.88M
Financing Cash Flow	-402.62M	-232.26M	-424.47M	-1.18B	-317.06M	39.91M

TKO Group Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 202.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 202.58 is below the 20-day moving average (MA) of 203.01, above the 50-day MA of 201.82, and above the 200-day MA of 182.46, indicating a neutral trend. The MACD of -0.96 indicates Positive momentum. The RSI at 49.32 is Neutral, neither overbought nor oversold. The STOCH value of 40.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TKO.

TKO Group Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FOXA	77 Outperform	$30.61B	16.38	17.33%	0.75%	14.91%	9.30%
TKO	71 Outperform	$39.52B	80.95	5.82%	1.07%	56.31%	―
LYV	69 Neutral	$33.77B	106.17	79.63%	―	5.39%	36.94%
WBD	68 Neutral	$68.26B	146.80	1.36%	―	-4.29%	―
NWSA	66 Neutral	$15.94B	33.66	5.59%	0.76%	-16.36%	29.53%
WMG	64 Neutral	$15.66B	43.22	61.97%	2.47%	4.37%	-16.22%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%