TKO Group Holdings (TKO) AI Stock Analysis

• Market Cap: $31.60B
• Dividend Yield: 0.24%
• Average Volume (3M): 1.27M
• Price to Earnings (P/E): 92.7
• Beta (1Y): 0.76
• Revenue Growth: 63.73%
• EPS Growth: N/A
• Country: US
• Employees: 890
• Sector: Communication Services
• Sector Strength: 88
• Industry: Entertainment
• EPS (TTM): 0.69
• Shares Outstanding: 81,747,470
• 10 Day Avg. Volume: 1,161,358
• 30 Day Avg. Volume: 1,273,639
• PEG Ratio: 0.51
• Price to Book (P/B): 3.17
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 23.18
• Enterprise Value/Market Cap: 0.49
• Enterprise Value/Revenue: 1.54
• Enterprise Value/Gross Profit: 9.19
• Enterprise Value/Ebitda: 7.07
• 1Y Price Target: $187.45
• Price Target Upside: 16.72% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13

TKO Group Holdings shows strong operational growth and strategic achievements, particularly in revenue and cash flow expansion. The earnings call provided a positive outlook with increased guidance. However, challenges in profitability and a high P/E ratio suggest caution. Technical indicators show moderate upward momentum.

Positive Factors

Financial Performance

TKO delivered another strong quarter, outperforming expectations on top- and bottom-line.

Guidance

Management raised future guidance and reported a free cash flow conversion rate greater than 60%, positioning TKO for sustained success.

Valuation

Shares are considered undervalued relative to peers, suggesting a buying opportunity at current levels.

Negative Factors

Media Rights

Recent macro volatility adds uncertainty to the outcomes of UFC and WWE PLE media rights assumptions.

Outlook

TKO’s weak 2025 outlook, rising costs, and uncertain UFC media rights renewal create significant near-term headwinds.

Shareholder Concerns

Parent Endeavor (EDV) that controls 59% of TKO was recently taken private and new owner may not be aligned with minority shareholders.

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 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 demonstrates strong revenue and cash flow growth, which highlights its operational capabilities. However, challenges in profitability with a low net profit margin and return on equity persist. The balance sheet shows moderate leverage and a stable asset base, suggesting a need for improved cost management and shareholder returns.

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.

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.

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.

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
1.90B	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
508.46M	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

• Technical Analysis Sentiment: Positive
• Last Price: 160.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 160.6 is above the 20-day moving average (MA) of 157.96, above the 50-day MA of 151.71, and above the 200-day MA of 137.12, indicating a bullish trend. The MACD of 4.09 indicates Negative momentum. The RSI at 53.73 is Neutral, neither overbought nor oversold. The STOCH value of 34.39 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
DIS	80 Outperform	$198.63B	22.57	8.75%	0.90%	5.33%	431.28%
FOXA	80 Outperform	$22.90B	13.03	16.89%	1.07%	15.70%	26.73%
FOX	77 Outperform	$21.95B	10.00	16.89%	1.16%	15.70%	26.73%
TKO	74 Outperform	$31.60B	92.69	4.19%	0.24%	63.73%	―
WMG	70 Outperform	$14.24B	31.80	89.20%	2.60%	-0.91%	-14.87%
Sector *	60 Neutral	$13.79B	7.12	-2.72%	3.79%	2.18%	-42.65%
WBD	57 Neutral	$22.44B	―	-27.69%	―	-5.58%	-254.85%

TKO Group Holdings Corporate Events

TKO Group Holdings Completes Major Acquisition

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.

Spark’s Take on TKO Stock

According to Spark, TipRanks’ AI Analyst, TKO is a Neutral.

TKO Group Holdings shows strong operational growth and strategic achievements, particularly in revenue and cash flow expansion. However, high valuation and profitability challenges temper the overall outlook. While the company is effectively leveraging its assets and strategic partnerships, the extremely high P/E ratio suggests overvaluation, warranting cautious investor consideration.

To see Spark’s full report on TKO stock, click here.

TKO Group Holdings Completes Major Acquisition Deal

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.