One-glance verdict
Undervalued
$531.63 our estimate vs market $175.50
Wall Street consensus: $231.05 (-56.5% lower than our fair-value estimate)
67% below our estimate, below the bear case
Fundamentals snapshot
TKO Group Holdings, Inc.
TKO · NYQ · Communication Services · Entertainment
Current price
$175.50
52-week range
$170.92 - $226.94
Market cap
$33.22B
Balance sheet
Stretched
4.12x Stretched
Net debt $4.36B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 12.0% last year.
- Reward Returns 7.1% on equity, ahead of 40% of its peers.
- Risk Net debt grew 24.2% over 3 years.
- Risk Operating margin compressed from 47.7% to 32.4% over 3 years.
What this company does
TKO Group Holdings, Inc.
TKO Group Holdings, Inc. is a sports and entertainment company that owns the UFC and WWE, meaning they make money from things like TV rights (what networks pay to show their wrestling and fighting events), live event tickets, merchandise sales, and advertising partnerships. Their financial performance, like how much profit they keep after costs (their margins), is important because it shows how well they are managing their popular entertainment brands. This company is relatively new, formed in 2023, and is part of a larger entertainment group.
How the company got here
TKO Group Holdings, Inc. was formed in September 2023 through the combination of two major sports and entertainment entities: the Ultimate Fighting Championship (UFC) and World Wrestling Entertainment (WWE) [2, 4]. The UFC, founded in 1993, was acquired by Endeavor (formerly WME-IMG) in 2016 [1]. WWE's history traces back to 1953, with its modern expansion accelerating in the 1980s [1, 2]. The creation of TKO brought these two distinct, yet complementary, live-event intellectual property franchises under one corporate umbrella, aiming to leverage scale benefits while maintaining their individual brand identities [1]. Endeavor, a talent and media conglomerate, holds a majority stake in TKO [2, 4].
What it actually does
TKO Group Holdings operates as a sports and entertainment company that owns and manages valuable intellectual property related to live events [7, 12]. The company's core strategy is to monetize these properties through various channels, including media rights, sponsorship, live event ticket sales, premium experiences, licensing, and consumer products [1, 6]. TKO is distinct from a typical media network because it controls the underlying brands and produces year-round content, benefiting from loyal global fan bases [1].
UFC
The UFC segment is centered around mixed martial arts (MMA) promotion [2, 4]. It generates revenue through the distribution of its programming content, ticket sales for live events, and site fees from international events [1, 7]. Additionally, the UFC benefits from partnerships, marketing initiatives, and licensing agreements for UFC-branded consumer products [1]. The segment also includes official training facilities known as Performance Institutes and franchised UFC Gyms [2].
WWE
The WWE segment focuses on sports entertainment, characterized by serialized weekly programming, creative storytelling, and premium live events [1, 2]. Revenue is primarily derived from media rights fees for its programming content and ticket sales for its global live events [1, 3]. This segment also engages in partnerships, marketing, and licensing of WWE-branded consumer products [1, 3].
IMG
The IMG segment specializes in sports representation, event management, and media services [2, 8]. It handles media rights management and sales, multi-channel content production and distribution, brand partnerships, strategic consulting, and digital services [1, 8]. IMG also offers hospitality services, including ticketing, curated guest experiences, live event production, and travel management [1]. This segment is a leading global sports marketing agency that partners with numerous sports rights holders [8].
What management is betting on now
TKO's current strategic priorities include integrating the UFC and WWE businesses to capture synergies while preserving their distinct brand identities [1]. Management is focused on expanding the value of media rights deals, a significant revenue stream for the company [1, 6]. They are also working to increase monetization from sponsorships and site fees for live events [1]. Furthermore, TKO aims to improve its overall profitability (margins) by centralizing certain corporate functions and shared services [1].
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$1.55B
Net income
$101.58M
Diluted EPS
1.34
Operating cash flow
$373.92M
Free cash flow
—
Fetching…
Sources
Revenue
$1.60B
Net income
$89.35M
Diluted EPS
1.12
Operating cash flow
$694.54M
Free cash flow
—
Fetching…
Sources
Revenue
$1.04B
Net income
$-2.38M
Diluted EPS
-0.08
Operating cash flow
$309.90M
Free cash flow
—
Fetching…
Sources
Revenue
$1.12B
Net income
$41.01M
Diluted EPS
0.47
Operating cash flow
$416.77M
Free cash flow
—
Fetching…
Sources
Revenue
$1.31B
Net income
$98.36M
Diluted EPS
1.17
Operating cash flow
$396.22M
Free cash flow
—
Fetching…
Sources
Revenue
$1.27B
Net income
$58.41M
Diluted EPS
0.69
Operating cash flow
$162.82M
Free cash flow
—
Fetching…
Sources
Revenue
$927.92M
Net income
$31.00M
Diluted EPS
0.28
Operating cash flow
$56.84M
Free cash flow
—
Fetching…
Sources
Revenue
$681.27M
Net income
$23.14M
Diluted EPS
0.28
Operating cash flow
$236.53M
Free cash flow
—
Fetching…
Sources
Is it cheap or expensive?
Fair value $531.63 vs current price $175.50
Wall Street consensus is the average analyst price target: $231.05 (-56.5% lower than our fair-value estimate).
Our most-likely fair value is $531.63 a share — about 202.9% above today's price of $175.50, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $4.4B. Interest coverage 4.1x.
Net debt
$4.36B
Interest coverage
4.12x
TKO Group Holdings, Inc.'s profit covers its interest bill about 4.1 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
TKO
BASELINE
TKO Group Holdings, Inc.
Total debt $4.95B Interest coverage 4.12x This is the baseline the peer rows are being compared against.
Total debt $11.28B Interest coverage 3.90x -5% vs TKO Has roughly the same debt cushion as TKO.
Total debt $5.16B Interest coverage 2.43x -41% vs TKO Carries about 1.7x less debt cushion than TKO.
Total debt $1.16B Interest coverage 1.47x -64% vs TKO Carries about 2.8x less debt cushion than TKO.
Total debt $32.02B Interest coverage 0.63x -85% vs TKO Carries about 6.6x less debt cushion than TKO.
Total debt $16.65B Interest coverage 17.16x +317% vs TKO Carries about 4.2x more debt cushion than TKO.
What you should know
The case for and against TKO
3 Rewards
2 Risks
Rewards
-
Revenue grew 12.0% last year.
-
Returns 7.1% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Net debt grew 24.2% over 3 years.
-
Operating margin compressed from 47.7% to 32.4% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
59.69x
Forward P/E
37.49x
P/B
3.84x
P/S
6.27x
EV/EBITDA
13.68x
PEG ratio
1.51x
Profitability
How much profit each dollar creates
Gross margin
59.5%
Operating margin
32.4%
Net margin
4.3%
ROE
7.1%
ROA
4.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.59x
Current ratio
1.28x
Quick ratio
0.72x
Total debt
$4.95B
Total cash
$592.48M
Growth
How the business has been compounding
Revenue TTM
$5.30B
Revenue 5Y CAGR
46.4%
EPS TTM
2.94
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$1.80B
Free CF TTM
$1.16B
FCF margin
21.9%
Dividend
Shareholder payout
Yield
1.8%
Payout ratio
108.7%
Last ex-div date
2026-09-15