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TKO Group Holdings, Inc. (TKO)
:TKO

TKO Group Holdings (TKO) AI Stock Analysis

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TK

TKO Group Holdings

(NYSE:TKO)

Rating:78Outperform
Price Target:
$205.00
▲(14.30%Upside)
TKO's strong financial performance and positive guidance from the recent earnings call are key contributors to its high score. Strategic acquisitions bolster its market position, while technical indicators suggest momentum but caution against overvaluation. Despite a high P/E ratio, the stock benefits from strong revenue growth and operational efficiencies.
Positive Factors
Earnings and Financial Performance
TKO reported strong 1Q results, which included the recently acquired Endeavor assets, that beat revenue and adj. EBITDA forecast for both UFC and WWE.
Growth and Expansion
The integration of recently acquired assets is expected to elevate earnings and cash flow growth.
Market Valuation
TKO trades at a substantial discount to its closest competitor despite having an equal-to-better growth profile.
Negative Factors
Corporate Governance
TKO acquired IMG and On Location from Endeavor in a $3.25B all-stock transaction that raised serious governance questions.
Partnerships and Relationships
Reports indicate the relationship between UFC and ESPN has deteriorated in recent years, with frustrations stemming from declining PPV sales, price hikes, and technical issues during events.
Strategic Alignment
The venture targets 12 annual fight cards in addition to large-scale 'super fights' like Canelo vs. Crawford, marking a material expansion outside of UFC’s core focus and raising questions about White’s bandwidth and strategic alignment.

TKO Group Holdings (TKO) vs. SPDR S&P 500 ETF (SPY)

TKO Group Holdings Business Overview & Revenue Model

Company DescriptionTKO Group Holdings (TKO) is a dynamic sports and entertainment company that operates primarily in the professional wrestling and mixed martial arts sectors. The company is a result of the merger between the Ultimate Fighting Championship (UFC) and World Wrestling Entertainment (WWE), combining the strengths of two of the most prominent organizations in combat sports and sports entertainment. TKO leverages its extensive media rights agreements, live event promotions, and diverse content offerings to engage a global audience.
How the Company Makes MoneyTKO Group Holdings primarily generates revenue through multiple streams including media rights, live events, consumer products, and sponsorships. Media rights are a significant revenue source, with the company negotiating lucrative deals with broadcasters and streaming platforms to distribute its content globally. Live events, such as pay-per-view and stadium shows, contribute to earnings through ticket sales and event-related merchandise. TKO also capitalizes on its brand by selling consumer products like apparel and collectibles. Sponsorship and advertising partnerships further enhance its revenue, with brands eager to associate with the company's high-profile events and large fanbase.

TKO Group Holdings Key Performance Indicators (KPIs)

Any
Any
Media Rights and Content Revenue Breakdown
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.
Chart InsightsUFC's revenue shows volatility but recently hit a high, reflecting record-breaking events and strong partnerships, as noted in the earnings call. WWE's revenue, while fluctuating, benefits from global expansion and a successful WrestleMania, contributing to a positive outlook. Despite challenges in other segments, TKO's raised guidance and cost-saving measures indicate confidence in overcoming macroeconomic pressures and capitalizing on strategic acquisitions. Investors should note the company's focus on expanding its media footprint and enhancing profitability through operational efficiencies.
Data provided by:Main Street Data

TKO Group Holdings Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 6.39%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements in UFC and WWE live events, partnerships, and WWE's expansion with Netflix. However, there were challenges in IMG's revenue and media rights for PBR. Despite macroeconomic concerns, overall performance and financial results were strong.
Q1-2025 Updates
Positive Updates
Record-Breaking UFC Events
UFC live events set new records in Q1, with a fight night in London delivering the highest-grossing fight night in company history and UFC 312 in Sydney setting the record for Australia's highest-grossing indoor arena event.
WWE's Global Expansion
WWE's partnership with Netflix expanded the brand's reach to 300 million subscribers weekly. WWE's content is now a mainstay on Netflix's global top 10, with significant engagement increases in Mexico, the UK, Australia, and Brazil.
IMG Renewals and Expansions
IMG announced major renewals, including partnerships with Conmebol through 2030, Euroleague Basketball through 2035-36, and Major League Soccer coverage on Apple TV, showcasing their global reach.
Strong Financial Performance
First quarter revenue was $1.269 billion, up 4%, with adjusted EBITDA of $417 million, an increase of 23%. Adjusted EBITDA margin increased to 33% from 28%.
WWE's Record-Setting WrestleMania
WrestleMania 41 in Las Vegas broke all-time records in gate, premium hospitality, viewership, sponsorship, merchandise, and social engagement.
Significant Increase in Partnerships
UFC partnerships and marketing revenue increased 32% to $64 million, driven by new partnerships and renewals, including the largest sponsorship deal in company history with Monster Energy.
Negative Updates
IMG Segment Revenue Decline
IMG segment revenue decreased by 13% to $476 million, with adjusted EBITDA down 10%. The decline was primarily due to On Location's performance for the Super Bowl and Collegiate Bowl games.
Challenges with PBR Media Rights
Corporate and other revenue included PBR and reflected a decrease in media rights due to the early termination of the Meritree Media content distribution deal.
Macroeconomic Concerns
Although not yet seeing a slowdown, management expressed caution due to potential macroeconomic impacts on consumer behavior, particularly in premium hospitality and marketing budgets.
Company Guidance
During TKO Group Holdings, Inc.'s Q1 2025 earnings call, the company raised its full-year guidance due to outperforming internal expectations for revenue and profitability. Key metrics highlighted include first-quarter revenue of $1.269 billion, an increase of 4%, and adjusted EBITDA of $417 million, up 23%, with a margin of 33%. The UFC segment reported revenue of $360 million, a 15% increase, and an adjusted EBITDA margin of 63%. WWE's revenue was $392 million, up 24%, with an adjusted EBITDA margin of 50%. TKO's updated full-year 2025 guidance now targets revenue between $4.49 and $4.56 billion and adjusted EBITDA of $1.49 to $1.53 billion. Notably, the company has identified $40 million in estimated run-rate cost savings, with $15 million expected to be realized in 2025. The guidance reflects the integration of newly acquired businesses IMG, On Location, and PBR, and excludes the impact of a $300 million nonrecurring payment related to the UFC antitrust settlement and M&A activities.

TKO Group Holdings Financial Statement Overview

Summary
TKO Group Holdings exhibits a strong financial performance with robust revenue growth and efficient cost management as evidenced by high profit margins. The balance sheet is stable, though there is potential for enhancing shareholder returns and optimizing asset use. Cash flows are a significant strength, with impressive growth and efficiency. Continued focus on improving net profitability and asset utilization could further solidify TKO's financial position in the competitive entertainment industry.
Income Statement
85
Very Positive
TKO Group Holdings has demonstrated strong revenue growth with the most recent TTM revenue increasing by 22.76% over the previous annual period. The gross profit margin is robust at 60.22%, indicating efficient production and cost management. Additionally, the company achieved a significant net profit margin improvement to 4.99% in the latest TTM. The EBIT margin of 22.52% and EBITDA margin of 32.56% reflect healthy operational efficiency. Overall, the income statement shows a positive trajectory in revenue and profitability, though further improvement in net profitability could enhance the score.
Balance Sheet
72
Positive
The balance sheet reveals a moderate debt-to-equity ratio of 0.74, which suggests a balanced approach to leveraging. With a return on equity (ROE) of 4.12% in the latest TTM, there is room for improvement in generating returns for shareholders. The equity ratio of 27.73% highlights a solid equity base, but increased asset utilization could further strengthen the financial position. While the company maintains a stable balance sheet, optimizing leverage and enhancing shareholder returns could improve its financial health.
Cash Flow
78
Positive
TKO's cash flow statement is favorable, with a strong free cash flow growth rate of 31.93% in the latest TTM. The operating cash flow to net income ratio of 4.00 indicates robust cash generation relative to net income, showcasing operational efficiency. The free cash flow to net income ratio at 3.91 further emphasizes strong cash flow management. While cash flow performance is commendable, maintaining this momentum in the future will be key to sustaining financial flexibility.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.44B2.80B1.67B1.14B1.03B891.15M
Gross Profit2.07B1.90B1.16B814.56M696.34M623.79M
EBITDA1.12B676.31M611.09M603.15M341.40M292.90M
Net Income171.65M9.41M-35.23M387.27M272.34M177.16M
Balance Sheet
Total Assets15.01B12.70B12.69B3.58B4.30B1.32B
Cash, Cash Equivalents and Short-Term Investments470.86M525.56M235.84M180.57M874.69M593.40M
Total Debt3.07B3.04B3.03B2.78B2.85B719.96M
Total Liabilities4.82B3.98B3.84B3.01B3.05B934.89M
Stockholders Equity4.16B4.09B4.11B568.92M1.25B383.99M
Cash Flow
Free Cash Flow670.79M508.46M419.75M489.32M430.10M329.55M
Operating Cash Flow686.90M583.41M468.38M501.72M441.24M351.24M
Investing Cash Flow-53.79M-59.05M12.28M-13.26M-11.48M-21.93M
Financing Cash Flow-407.32M-232.26M-424.47M-1.18B162.51M-199.61M

TKO Group Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price179.35
Price Trends
50DMA
163.57
Positive
100DMA
158.29
Positive
200DMA
145.31
Positive
Market Momentum
MACD
4.92
Negative
RSI
72.50
Negative
STOCH
93.82
Negative
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 179.35 is above the 20-day moving average (MA) of 169.60, above the 50-day MA of 163.57, and above the 200-day MA of 145.31, indicating a bullish trend. The MACD of 4.92 indicates Negative momentum. The RSI at 72.50 is Negative, neither overbought nor oversold. The STOCH value of 93.82 is Negative, 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 65 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

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$24.49B14.1216.89%0.95%15.70%26.73%
FOFOX
80
Outperform
$24.49B13.0216.89%1.03%15.70%26.73%
TKTKO
78
Outperform
$35.49B104.124.19%0.85%63.73%
DIDIS
78
Outperform
$219.94B24.998.75%0.82%5.33%431.28%
WMWMG
64
Neutral
$14.18B31.6189.20%2.65%-0.91%-14.87%
62
Neutral
€14.48B-10.571.48%4.02%2.00%1.26%
WBWBD
59
Neutral
$27.96B-27.69%-5.58%-254.85%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TKO
TKO Group Holdings
181.95
72.35
66.01%
DIS
Walt Disney
124.01
27.31
28.24%
FOXA
Fox
56.04
21.95
64.39%
FOX
Fox
51.63
19.72
61.80%
WMG
Warner Music Group
27.24
-2.66
-8.90%
WBD
Warner Bros
11.46
4.26
59.17%

TKO Group Holdings Corporate Events

Executive/Board ChangesShareholder Meetings
TKO Group Holdings Elects Directors at Annual Meeting
Neutral
Jun 13, 2025

On June 12, 2025, TKO Group Holdings, Inc. held its annual meeting of stockholders where approximately 96.26% of voting power was represented. During the meeting, twelve directors were elected to hold office until the 2026 annual meeting, and the appointment of KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, was ratified.

The most recent analyst rating on (TKO) stock is a Buy with a $132.00 price target. To see the full list of analyst forecasts on TKO Group Holdings stock, see the TKO Stock Forecast page.

M&A TransactionsBusiness Operations and Strategy
TKO Group Holdings Completes Major Acquisition
Positive
May 8, 2025

On February 28, 2025, TKO Group Holdings completed the acquisition of several businesses, including Professional Bull Riders and various events businesses, for approximately $3.25 billion. This strategic acquisition is expected to significantly impact TKO’s operations by expanding its portfolio and enhancing its market positioning in the sports and entertainment industry.

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.Date of analysis: Jun 28, 2025