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TKO Group Holdings, Inc. (TKO)
NYSE:TKO
Top Page
TKO Group Holdings
(NYSE:TKO)70Outperform
Positive Factors
Business Strategy
Management’s continued strong execution, in particular around live events and sponsorship, should drive attractively compounding free cash flow.
Financial Performance
TKO finished the year with another strong quarter, beating revenue & adj. EBITA expectations.
Negative Factors
Guidance and Outlook
TKO’s weak 2025 outlook, rising costs, and uncertain UFC media rights renewal create significant near-term headwinds.
TKO Group Holdings (TKO) vs. S&P 500 (SPY)
Market Cap
$26.07B
Dividend YieldN/A
Average Volume (3M)1.45M
Price to Earnings (P/E)―
Beta (1Y)0.73
Revenue Growth58.35%
EPS Growth-81.32%
CountryUS
Employees1,250
SectorCommunication Services
Sector Strength85
IndustryTraditional Media
Share Statistics
EPS (TTM)-0.22
Shares Outstanding81,553,820
10 Day Avg. Volume1,763,213
30 Day Avg. Volume1,452,891
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)9.30
Price to Cash Flow (P/CF)114.70
P/FCF Ratio67.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$176.55Price Target Upside22.83% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
TKO Group Holdings Business Overview & Revenue Model
Company DescriptionTKO Group Holdings (TKO) is a prominent entity in the entertainment and sports sector, primarily focused on combat sports. TKO is the parent company for two of the most recognized brands in the industry: World Wrestling Entertainment (WWE) and Ultimate Fighting Championship (UFC). These brands are known for their dynamic live events, televised content, and extensive global fan bases. TKO leverages its brands to deliver a diverse array of content across multiple platforms, catering to a variety of audiences worldwide.
How the Company Makes MoneyTKO Group Holdings generates revenue through various streams associated with its brands WWE and UFC. The company earns money from live event ticket sales, broadcasting rights, pay-per-view purchases, and subscriptions to its streaming services. Additionally, TKO capitalizes on merchandise sales, including branded apparel and memorabilia. Sponsorships and advertising partnerships also contribute significantly to its revenue, as these brands attract substantial viewership and fan engagement. Licensing deals, such as video games and other media extensions, further bolster TKO's income. The strategic partnerships with broadcasters and digital platforms enhance the distribution and monetization of content globally, ensuring a steady flow of revenue.
TKO Group Holdings Financial Statement Overview
Summary
TKO Group Holdings is experiencing substantial growth, particularly in revenue and cash flow, which is a positive indicator of its operational capabilities. However, the company faces challenges in profitability with a low net profit margin and return on equity. While its balance sheet shows moderate leverage and a stable asset base, improvement in cost management and shareholder returns could enhance overall financial performance.Income Statement
TKO Group Holdings shows robust revenue growth, with a significant increase in total revenue from 2023 to 2024. The gross profit margin remains strong, although the net profit margin is relatively low due to lower net income. The EBIT and EBITDA margins show positive operational efficiency, but the decline in EBIT implies potential cost pressures or higher expenses.78
Positive
Balance Sheet
The company's balance sheet reflects moderate leverage, with a debt-to-equity ratio suggesting a balanced capital structure. The equity ratio indicates a stable asset base, but the return on equity (ROE) is low, indicating that shareholder returns are not optimal. The substantial increase in total assets aligns with the company's expansion efforts.62
Positive
Cash Flow
Cash flow statements highlight strong operating cash flows, with an impressive increase in free cash flow, suggesting efficient cash management. The operating cash flow to net income ratio is high, indicating that the company is effectively converting its income into cash. The free cash flow growth rate is commendable, demonstrating solid financial health.85
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.80B | 1.67B | 1.14B | 1.03B | 891.15M | Gross Profit |
| 2.80B | 1.16B | 814.56M | 696.34M | 623.79M | EBIT |
| 282.90M | 446.66M | 544.39M | 391.14M | 314.13M | EBITDA |
| 676.31M | 611.09M | 603.15M | 341.40M | 292.90M | Net Income Common Stockholders |
| 9.41M | -35.23M | 387.27M | 272.34M | 177.16M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 525.56M | 235.84M | 180.57M | 874.69M | 593.40M | Total Assets |
| 12.70B | 12.69B | 3.58B | 4.30B | 1.32B | Total Debt |
| 3.04B | 3.03B | 2.78B | 2.85B | 719.96M | Net Debt |
| 2.51B | 2.79B | 2.60B | 1.98B | 257.86M | Total Liabilities |
| 3.98B | 3.84B | 3.01B | 3.05B | 934.89M | Stockholders Equity |
| 4.09B | 4.11B | 568.92M | 1.25B | 383.99M |
| Cash Flow | Free Cash Flow | |||
| 583.41M | 419.75M | 489.32M | 430.10M | 329.55M | Operating Cash Flow |
| 583.41M | 468.38M | 501.72M | 441.24M | 351.24M | Investing Cash Flow |
| -59.05M | 12.28M | -13.26M | -11.48M | -21.93M | Financing Cash Flow |
| -232.26M | -424.47M | -1.18B | 162.51M | -199.61M |
TKO Group Holdings Technical Analysis
Neutral
143.73
Price Trends
153.10
Negative
141.45
Positive
127.37
Positive
Market Momentum
-2.69
Positive
36.55
Neutral
27.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TKO, the sentiment is Neutral. The current price of 143.73 is below the 20-day moving average (MA) of 160.93, below the 50-day MA of 153.10, and above the 200-day MA of 127.37, indicating a neutral trend. The MACD of -2.69 indicates Positive momentum. The RSI at 36.55 is Neutral, neither overbought nor oversold. The STOCH value of 27.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TKO.
TKO Group Holdings Risk Analysis
TKO Group Holdings disclosed 69 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $137.14B | 8.75 | 19.24% | 3.42% | 1.78% | 11.62% | |
76 Outperform | $31.63B | 48.32 | 827.53% | ― | 1.79% | 99.46% | |
74 Outperform | $190.60B | 34.23 | 5.54% | 0.90% | 3.97% | 89.53% | |
70 Outperform | $26.07B | ― | 0.23% | ― | 58.35% | -81.32% | |
63 Neutral | $2.23B | 20.92 | 6.01% | ― | -9.84% | -61.26% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
55 Neutral | $4.76B | 83.45 | -20.85% | ― | 21.45% | 47.50% |
* Communication Services Sector Average
Performance Comparison
TKO
TKO Group Holdings
143.73
62.34
76.59%
CMCSA
Comcast
37.59
-3.67
-8.89%
LYV
Live Nation Entertainment
127.51
27.77
27.84%
DIS
Walt Disney
105.51
-3.82
-3.49%
MSGS
Madison Square Garden Sports
196.84
11.34
6.11%
IQ
Iqiyi
2.35
-1.59
-40.36%
TKO Group Holdings Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -9.92% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call showed a strong financial performance with record-breaking achievements in media rights, live events, and sponsorship revenues. However, there were challenges with WWE revenue declines and margin impacts due to event timing and location changes.Highlights
Record Financial Performance
TKO delivered record financial performance in 2024 with revenue of $2.804 billion and adjusted EBITDA of $1.251 billion, exceeding revised guidance. Adjusted EBITDA margin was 45%.
Successful Integration of UFC and WWE
The integration of UFC and WWE exceeded guided net savings of $100 million, driving efficiency across the company.
Media Rights Expansion
Secured a transformative partnership moving WWE Raw to Netflix, providing exposure to 300 million subscribers and driving significant audience growth for NXT on the CW.
Record-Breaking Live Events
UFC and WWE set multiple all-time highs for ticket sales, attendance, and gate revenues. UFC delivered 10 all-time highest grossing event records in 2024.
Sponsorship Revenue Growth
UFC sponsorship revenue grew 28%, marking the seventh consecutive record-breaking year, while WWE set an all-time high in sponsorship revenue, growing 20% year-over-year.
Strategic Acquisitions
Plans to close acquisitions of IMG, On Location, and PBR in Q1 2025, expanding the global sports portfolio.
Lowlights
WWE Revenue Decline
WWE segment experienced a 10% decrease in revenue due to short-term domestic rights deal impact, causing a $50 million revenue shortfall compared to Q4 2023.
Saudi PLE Shift
The timing shift of a Saudi PLE from 2025 to 2026 is expected to have an unfavorable impact of approximately $55 million on total company revenue for 2025.
Margin Impact from Event Mix
The shift of UFC events from Apex to international locations is expected to result in lower margins due to higher production costs.
Company Guidance
In the recent earnings call, TKO provided comprehensive guidance and reported record financial performance for 2024. The company achieved revenue of $2.804 billion and adjusted EBITDA of $1.251 billion, surpassing their revised guidance, with an adjusted EBITDA margin of 45%. The integration of UFC and WWE facilitated over $100 million in net savings, and the transition of WWE's Raw to Netflix was highlighted as transformative, reaching 300 million subscribers. TKO also reported significant audience growth, particularly for WWE SmackDown and NXT, with the latter witnessing a nearly 100% increase in fourth-quarter viewership in the 18 to 34 demographic. Live events for both UFC and WWE marked record-breaking ticket sales and attendance, with UFC achieving 10 all-time high grossing events and WWE setting revenue records at 10 premium live events. Sponsorship revenue soared, with UFC sponsorship increasing by 28% and WWE by 20% year-over-year. Looking ahead, TKO is targeting a revenue range of $2.93 billion to $3.0 billion and an adjusted EBITDA of $1.35 billion to $1.39 billion for 2025, even as they plan fewer events at the UFC Apex to expand internationally. They are also preparing for their acquisitions of IMG, On Location, and PBR, aimed at broadening their global sports portfolio.TKO Group Holdings Corporate Events
M&A TransactionsBusiness Operations and Strategy
TKO Group Holdings Completes Major Acquisition Deal
Positive
Feb 28, 2025
On February 28, 2025, TKO Group Holdings announced the completion of its acquisition of IMG, On Location, and Professional Bull Riders from Endeavor Group Holdings. This strategic move is expected to enhance TKO’s portfolio and strengthen its position in the sports and entertainment industry by expanding its expertise in sports rights, production, and premium events. The acquisition, valued at $3.25 billion, involves the transfer of businesses to TKO in exchange for TKO Common Units and shares, with a purchase price adjustment settled in equity.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.