TKO Group Holdings TKO
Communication Services · Entertainment · Synthos Deep Dive · 2026-07-03
The Overview
TKO is the company behind UFC (mixed-martial-arts fighting) and WWE (pro wrestling), plus IMG/On Location which sells premium hospitality packages for events like the Olympics and the FIFA World Cup. It makes most of its money selling the TV and streaming rights to these shows (to Netflix, ESPN, Paramount) and from live events and sponsorships. There is essentially no competitor that can make another UFC or WWE — that scarcity is the whole point.
Is the stock cheap or expensive? Expensive on reported earnings (about 68× last year's profit), but a lot less scary on cash flow — the company generates roughly 12 cents of free cash for every dollar of stock value, which is healthy. Our verdict is Buy — Tactical: a good business worth owning, but priced high enough and with a weak-looking chart, so buy patiently, in pieces.
Here's what our three scores mean in everyday terms:
- Downside Risk 5/10 (middle of the road). The stock is calm (it doesn't swing much) and gushes cash, but it carries real debt and the price already assumes success.
- Growth Quality 8/10 (very good). Two one-of-a-kind franchises, fat profit margins, and pricing power most companies would kill for.
- Exponential Potential 5/10 (moderate). It should keep growing steadily, but the big one-time jump from merging WWE into UFC has already happened — don't expect it to double fast.
The one big worry: most of the money rides on long-term TV/streaming deals. Those get renegotiated every few years, and if a future renewal disappoints, the stock — priced for continued success — would drop.
Putting a number on it: our fair-value estimate is $215 against a current price of $184.64 — real upside if our numbers are right.
Our summary metrics
Low beta (0.62) & 12% FCF yield, but 68× trailing EPS, 2.2× net-debt/EBITDA & an Up-C minority-interest overhang.
~18% forward EPS CAGR, 51% gross / 34% adj-EBITDA margin, monopoly-grade live-sports IP, but EPS is capital-structure-noisy.
Structurally AI-proof live IP with pricing power, but a mid-teens compounder now — the merger step-change is behind it.
What does “fair value” mean?
Fair value is Synthos’s estimate of what one share is worth today, based on our model of the company’s future cash generation and the risks to it. It is not a price target or a prediction of where the stock trades next quarter — it’s the price where we think risk and reward are balanced. Above it, you’re paying for outcomes better than our base case; below it, the market is offering a margin of safety.
The model’s inputs and weightings are proprietary — they’re the product. What we publish is the output, plus an independent, public-math cross-check further down the page (“Check our number”) so you can judge it for yourself.
What do the 5 tiers mean? (Core · Tactical · Watch · Hold · Avoid)
Exponential Potential
Structurally AI-proof live IP with pricing power, but a mid-teens compounder now — the merger step-change is behind it.
“Live experiences cannot be disrupted by AI; as content becomes infinite and cheap, scarce live events grow more valuable, not less.”
What could take this further than the base case — and where the market may be underpricing it. Full forward-growth and acceleration math in Deeper analysis, §4 below.
Deeper analysis
Technicals, fundamentals, valuation, and the full expert-claim evidence panel — the detail behind the numbers above.
Reference table
| Street consensus | $236 (high $251 / low $225; 16 Buy · 3 Hold · 0 Sell) — context, not our anchor |
| Valuation | 68× trailing EPS · ~42× FY26E · ~37× FY27E · ~19× FY30E · EV/S 3.5× · EV/EBITDA 12.2× · FCF yield 12% |
| Technicals | Downtrend/consolidation — $194, −13.6% off 52-wk high, below 50- & 200-DMA, RSI 36, +10.7% 12-mo (SPY +20.6%) |
| Conviction | Moderate — only 2 KB voices, but both high-conviction (Invest Like the Best 95, All-In 85); this is a thin panel, not a broad one |
| Position sizing | Satellite quality, ~2–3%; scale in — chart is weak |
What the experts actually said 3 traceable claims on TKO · showing the highest-conviction voices
“Live experiences cannot be disrupted by AI; as content becomes infinite and cheap, scarce live events grow more valuable, not less.”
“TKO merger delivering on integration/broadcast deals; stock ran from $79 to $200, executing everything promised.”
“Live events are the new luxury — TKO (UFC holdco) ran from ~25 to 205; maybe still a trend to ride as live entertainment grows; people want off their phones.”
Every claim reconciles to a real claim_id in the Synthos knowledge base — this is the evidence the verdict is built on, not vibes. Management (the company itself) is shown but half-weighted; one cautionary voice is included on purpose.
Price & moving averages 12 months · 50 & 200-day averages · 52-week range
Solid line = price · dashed line = 50-day average · dotted line = 200-day average · the two thin horizontal lines mark the 52-week high and low. Price above both averages is an uptrend.
Data summary: last close $184.64, 3% below the 50-day average ($191), 6% below the 200-day average ($197) — a downtrend. 18% below the 52-week high of $225, 5% above the 52-week low of $176.
Bollinger Bands 20-day average ± 2 standard deviations
The shaded band widens when the stock gets more volatile. Riding the upper edge = strong momentum (sometimes stretched); the lower edge = weak / potentially oversold.
Data summary: price $184.64 is currently inside the band (band $180–$203).
RSI (14) momentum gauge · 0–100
Above 70 (overbought zone, shaded) = overbought, below 30 (oversold zone, shaded) = oversold. Currently 42.
MACD 12 / 26 / 9 · trend & momentum
The MACD line crossing above the signal line (bars flip to the up color) = momentum turning up; crossing below (bars flip to the down color) = turning down. Bar height = the size of that gap.
Data summary: MACD is currently below its signal line by 1.09, negative momentum.
Relative performance vs S&P 500 & its sector (XLC (sector)), set to 100 a year ago
Solid = TKO · dashed = S&P 500 · dotted = XLC (sector). A rising line means it is beating that benchmark — the sector line shows whether it is a leader or laggard within its own group.
Forward revenue & earnings actual → estimate · "FY" = fiscal year, "E" = estimate
Darker bars = actual results, brighter = analyst estimates. Taller bars to the right = expected growth.
Key stats an RIA wants
1. What it is
TKO Group Holdings (NYSE: TKO) is a live-sports and entertainment company formed in the September 2023 merger of UFC and WWE, majority-controlled by Endeavor Group Holdings and run by Ariel Emanuel (Executive Chair/CEO) and Mark Shapiro (President/COO). In 2025 it absorbed IMG, On Location, and PBR from Endeavor, materially enlarging the top line. It monetizes premium intellectual property four ways: Media & Content (rights fees — the largest and most durable stream), Live Events, Sponsorships, and Consumer Products Licensing, distributing content to ~170 countries. Fiscal year ends December 31.
Reporting note — read this before the multiples. TKO is an Up-C structure: the FMP "market cap" of ~$14.6B reflects only the ~75M Class A public shares, while diluted share count is ~194M (the balance held by Endeavor/other holders via the operating partnership, shown as $5.5B minority interest). So the economic equity value and true P/E are best read off diluted EPS and enterprise value (~$17.8B), not the headline Class A cap. We anchor valuation on EV/EBITDA and forward diluted EPS for exactly this reason.
Revenue mix (FY2025, from filings & the Q1'26 release):
- By segment (Q1'26 run-rate, from the 8-K): IMG $655M, WWE $476M, UFC $401M per quarter — UFC and WWE are the high-margin engines (Q1'26 adj-EBITDA margins 63% and 54%); IMG/On Location is larger-revenue but thin-margin (event hospitality).
- By geography (FY2025): North America $3.51B (76%) · EMEA $898M · Asia Pacific $242M · Latin America $80M. US/North-America-concentrated, with a deliberate international push (Saudi Arabia events, Milano-Cortina Olympics, FIFA World Cup '26 hospitality).
The strategic engine is media-rights escalation: new/renewed distribution deals with Netflix (WWE Raw), ESPN, and Paramount (UFC, from Jan 2026) are the primary driver of the step-up in revenue and margin.
2. The expert thesis — why the (thin) panel is bullish (traceable)
Honesty first: this is a thin panel — only 2 traceable claims in the Synthos KB, not a broad conviction wall. Both voices are high-conviction and high-skill, but breadth is 2, so this verdict leans more on fundamentals and quant than on a deep expert chorus. Two threads:
- Live experiences are structurally AI-proof — the core secular thesis. Invest Like the Best (
invest_like_the_best-xDuqUlZZ8Vk:497ae14edd, bullish, conviction 95, skill 1.0): "Live experiences cannot be disrupted by AI; as content becomes infinite and cheap, scarce live events grow more valuable, not less." This is the single most important reason to own scarce live IP in an AI-flooded content world — a demand-side moat that widens over time. - The merger is executing and the market has paid for it. All-In (
all_in-KG_nHmHUZLw:29ff8de346, bullish, conviction 85, skill 1.0): "TKO merger delivering on integration/broadcast deals; stock ran from $79 to $200, executing everything promised." An explicit acknowledgment that management has hit its marks — and a caution embedded in it: a large chunk of the re-rating has already happened (the stock roughly tripled), which is precisely why we grade Exponential Potential only Moderate.
Honest composite note. There is no cautionary voice in the KB for TKO and only two bullish claims, so the net signal is genuinely positive but narrow. We are not treating two claims as a mandate; the fundamentals (§5) and valuation (§6) carry the verdict. Net conviction is modest by design.
3. Synthos scores & the Bull / Base / Bear cases
The one-glance judgment — three scores, 0–10, each anchored to real metrics (not probabilities we can't honestly calibrate):
| Score | 0–10 | The read |
|---|---|---|
| Downside Risk (lower = safer) | 5 · Moderate | Beta 0.62 and a 12% FCF yield cushion the downside, but 68× trailing EPS, 2.2× net-debt/EBITDA, and an Up-C minority-interest overhang mean a full price with leverage underneath. |
| Growth Quality | 8 · High | Two irreplaceable franchises, 51% gross / 34% adj-EBITDA margins, monopoly-grade pricing power on media rights — but reported EPS is capital-structure-noisy and IMG dilutes blended margin. |
| Exponential Potential | 5 · Moderate | Structurally AI-proof live IP with a real demand-side moat, but forward growth is a mid-teens compounder; the WWE-merger step-change is already banked. |
The three cases (our own scenario model — assumptions shown; each target is a ~12–18-month fair value). We deliberately do not attach probabilities: the base case is by definition the expected path, so a weighted blend would just restate it with false precision. Instead the cases bound the range, and the scores above summarize them.
| Case | Key assumptions | Fair value |
|---|---|---|
| Bull | Next media-rights cycle (UFC/WWE renewals + FIFA/Olympics hospitality) re-rates the franchise; FY27E EPS beats toward ~$6.0 (vs $5.30 cons) and the market pays a premium ~44× for scarce AI-proof IP. | ~$265 (+36%) |
| Base (our anchor) | Estimates roughly hit — FY27E EPS $5.30; a durable mid-teens compounder with monopoly IP earns a ~40× forward multiple (≈15× EV/EBITDA on ~$2.4B). | ~$215 (+11%) |
| Bear | A media-rights renewal disappoints or live-events cyclicality bites; EPS stalls near ~$4.7 and the multiple de-rates to ~32× as growth is seen as fully banked. | ~$150 (−23%) |
Synthos fair value = the base case, ~$215 (+11%), with the full $150–$265 span as the honest range. Our base sits below the Street's $236 consensus — we respect the IP but are less willing than the sell side to pay up for a decelerating, capital-structure-complex compounder whose chart is rolling over. This is a tracked call — the Forecaster Scorecard grades it once it matures.
4. Exponential Potential
Synthos separates compounders (durable high returns on capital) from exponentials (accelerating, multi-baggers-from-here). TKO is a high-quality compounder whose steepest acceleration is behind it:
- Forward growth: revenue CAGR FY25→FY30E ~9.7% ($4.74B → $7.52B); EPS CAGR ~18% ($4.68 FY26E → $10.53 FY30E) as margin and buyback compound. (FY25→FY26 revenue optically jumps ~22% partly because IMG lands in the full-year base — the organic rate is lower.)
- Acceleration (the 2nd derivative) is negative: the huge step was the WWE merger + IMG roll-in (revenue $1.67B FY23 → $2.80B FY24 → $4.74B FY25), most of it acquisition-driven. From here, consensus revenue growth flattens toward ~1% FY27 then re-accelerates only modestly to high-single-digits by FY30. This is a compounder, not a name on an exponential ramp.
- Room to run: at ~$17.8B EV there is room versus mega-cap media, and the live-sports-rights TAM is expanding (streamers bidding up scarce live inventory). But the multibagger case requires repeated rights-fee step-ups, not a single secular inflection.
- Reinvestment runway: capital-light at the franchise level (capex only ~1.4% of revenue) with ~$1.16B FY25 free cash flow — the cash-return story (buybacks + dividend) is real and is doing much of the per-share growth.
Exponential Potential: Moderate. Own it for the AI-proof scarcity moat + steady per-share compounding + cash returns, not for a fast multibagger. The one genuine call option is the next media-rights cycle re-rating the whole franchise higher.
5. Financials (real numbers — FMP annual/quarterly + Q1'26 8-K)
- Revenue: FY25 $4.735B, +68.9% (FY24 $2.80B, +67% on FY23 $1.67B) — but most of the two-year jump is acquisition-driven (WWE full-year, then IMG/On Location/PBR). Q1'26 revenue $1.597B, +26% YoY — a cleaner organic read.
- Segment engines (Q1'26 8-K): UFC adj-EBITDA margin 63%, WWE 54%, IMG thin (hospitality). UFC media-rights lift from the new Paramount deal; WWE lift from Netflix/ESPN.
- Margins: gross 51.5% TTM, adj-EBITDA ~34% (mgmt basis), reported EBITDA margin ~28.9% TTM. Net margin is optically low (4.5% TTM to controlling interest) because of D&A on acquired intangibles, interest, and minority-interest allocation — cash economics are far better than GAAP net income suggests (income quality 3.9×).
- Earnings: GAAP net income to TKO was noisy (FY24 near-zero, FY25 $195M to controlling / $438M bottom-line); diluted EPS $2.26 FY25, and Q1'26 diluted EPS $1.12. Trailing GAAP EPS is the denominator behind the scary 68× — read it alongside FCF.
- Cash flow: operating CF $1.286B, FCF $1.159B FY25 — a 12% FCF yield on EV. Q1'26 FCF was inflated by ~$582M of FIFA World Cup escrow pre-payments (timing, will reverse) — don't annualize that quarter.
- Balance sheet: total debt $4.06B, net debt $3.23B, net-debt/EBITDA 2.2× — investment-grade-ish but real leverage; interest coverage ~10×. FMP letter rating B- (penalized on P/E, P/B, and debt-to-equity).
6. Valuation — priced in or room?
On trailing GAAP, TKO looks extreme (68× EPS, 4.5× P/B), but that denominator is distorted by intangible amortization and the Up-C structure. The cleaner lenses: EV/EBITDA 12.2×, EV/sales 3.5×, FCF yield ~12%, and forward diluted P/E of ~42× FY26E → ~37× FY27E → ~19× FY30E (on $4.68 / $5.30 / $10.53 consensus EPS at today's $194). The bull case is that EPS growth (buyback + margin + rights escalation) compresses the multiple fast even at a flat price; the bear case is that ~40× forward is a lot to pay for ~1% FY27 revenue growth. A ~12% FCF yield on a monopoly-IP business is genuinely attractive and is the strongest single valuation argument. Street targets (context): consensus $236, high $251, low $225 — tighter and higher than our base. Our ~$215 base FV is more conservative than consensus because we discount the decelerating organic line and the capital-structure complexity. Not a value buy; a quality-IP-at-a-full-price buy with a real cash-flow floor.
7. Technicals (from the tech block)
- Trend: down/consolidating. $194 sits below the 50-DMA ($195.6) and 200-DMA ($198.0) — the opposite of the LLY-style uptrend; no golden-cross support here. MACD only mildly positive (+1.5).
- Location: −13.6% off the 52-week high ($224.96), +24.9% off the 52-week low ($155.61) — mid-range, and the max drawdown from peak is the full −13.6%.
- Momentum: RSI(14) 35.7 — near oversold (<40), i.e. weak/washed-out rather than stretched; not a breakout entry.
- Relative strength (the tell): TKO +10.7% 12-mo vs SPY +20.6% and QQQ +30.3%; −3.3% 3-mo vs SPY +13.7%. Underperforming both the market and the Nasdaq over every window — the chart does not confirm the fundamental thesis right now.
- Read: technicals argue for patience — a washed-out, below-average name. That is fine for a Tactical accumulate (scale in on weakness), but there is no momentum tailwind; wait for stabilization above the 200-DMA for confirmation.
8. Moat & competitive position
TKO's moat is owned, non-replicable live IP: nobody can manufacture a second UFC or WWE, and the value of that scarcity rises as AI floods the world with cheap content (invest_like_the_best-xDuqUlZZ8Vk:497ae14edd). The economic moat shows up as pricing power on media rights — streamers (Netflix, ESPN, Paramount) competing for scarce live inventory drives escalating rights fees — plus recurring sponsorship and licensing. The competitive frame is unusual: TKO doesn't really have a like-for-like public peer; the FMP "peers" are a grab-bag of communication-services names, not true comps.
Peer set (FMP-supplied, market cap — imperfect comps): News Corp $15.0B, Omnicom $22.4B, Paramount Skydance $11.3B, Roku $21.1B, Snap $8.2B, Telkom Indonesia $13.7B, Twilio $31.8B, Warner Music $14.8B, Zillow $8.0B. None owns comparable live-sports monopoly IP; TKO's margin and moat profile is closer to a live-sports-league/rights owner than to any of these — which is exactly why it commands a premium multiple.
9. Management, capital allocation & guidance
- Capital allocation: shareholder-return-heavy. FY25 returned ~$1.5B via buybacks (~$867M) + dividends (~$641M), and Q1'26 returned ~$1.0B; the board authorized an additional $1B buyback (May 2026). Capex is minimal (~1.4% of revenue). This is a cash-return compounder, and buybacks are doing real per-share work — appropriate given the FCF yield, though leverage (2.2×) caps how aggressive it should get.
- Insider activity: director Nick Khan sold in a clustered set of open-market Rule-10b5-1 dispositions on 2026-06-12 (~4,300 sh across $199–$207) plus a routine award. A single director trimming near recent highs — worth noting but not a broad insider-selling signal; no cluster of C-suite discretionary dumping in the sampled window.
- Management's own guidance (half-weighted — their own book): in the Q1'26 earnings release (SEC 8-K, filed 2026-05-06), management reaffirmed FY2026 guidance: revenue $5.675B–$5.775B and Adjusted EBITDA $2.240B–$2.290B, and touted UFC (White House event, Paramount deal), WWE (Netflix/ESPN), and On Location's FIFA World Cup '26 partnership. Emanuel called it "a formidable start to 2026"; the $1B buyback add is framed as conviction in "long-term value." Treat as self-interested (half-weight): the reaffirmed adj-EBITDA midpoint (~$2.27B) implies ~15% growth on FY25 and is consistent with the consensus we model.
10. Catalysts & what to watch
- Next earnings: 2026-08-05 (Q2'26; Street EPS $1.51, revenue ~$1.55B). Key lines: media-rights revenue growth, UFC/WWE adj-EBITDA margins, and whether FY26 guidance ($5.675–5.775B rev / $2.24–2.29B adj-EBITDA) is reaffirmed or raised.
- Media-rights renewals: the single biggest swing factor — the health of the next UFC/WWE cycle (bidding tension among Netflix/ESPN/Paramount/Amazon) drives the re-rating case.
- FIFA World Cup '26 & Olympics hospitality (On Location): a 2026 revenue catalyst, but low-margin and lumpy — watch mix, not just top line.
- Buyback pace: how fast the incremental $1B is executed = per-share EPS support.
- Leverage / rates: with 2.2× net-debt/EBITDA, refinancing terms matter.
Thesis tripwires (what would change the call): a disappointing media-rights renewal; two quarters of organic (ex-acquisition) revenue deceleration; adj-EBITDA margin compression below ~32%; or FCF failing to cover the cash-return program without adding leverage.
11. Key risks
- Media-rights renewal cyclicality (structural): most value rests on periodically renegotiated distribution deals; a soft renewal in a full-priced stock is the primary downside.
- Valuation / de-rating: ~40× forward EPS leaves little room if organic growth (near ~1% FY27 consensus) disappoints.
- Capital-structure complexity: Up-C minority interest, GAAP EPS distorted by intangible amortization, and 2.2× leverage — the "cheap on FCF, dear on GAAP" gap can whipsaw sentiment.
- Key-man / controlled-company governance: Endeavor control and an Emanuel-led team concentrate strategic and reputational risk; UFC/WWE also carry event-safety and talent/regulatory headline risk.
- Chart is weak: underperforming SPY/QQQ over 3-, 6-, and 12-month windows — no momentum support today.
- Thin expert coverage: only 2 KB claims — conviction is fundamentals-and-quant-driven, not a broad panel.
12. Verdict, position sizing & monitoring
Buy — Tactical. TKO owns two of the most durable, structurally AI-proof live-IP monopolies in media, earns monopoly-grade margins, throws off a ~12% FCF yield, and is returning enormous cash to holders — a genuinely high-quality franchise (Growth Quality 8/10). But the WWE-merger step-change is already banked, forward organic growth is only mid-teens on EPS (single-digits on revenue), the stock still prices ~40× forward earnings, and the chart is rolling over (below both moving averages, lagging SPY/QQQ). With only 2 KB voices, the conviction is moderate and fundamentals-driven. That combination — great business, full price, weak tape, thin panel — is a Tactical accumulate, not a Core pound-the-table.
- Sizing: satellite quality, ~2–3% of a portfolio — scale in on weakness (the RSI-36, below-200-DMA setup argues for patience) rather than a lump. Add on stabilization above the 200-DMA or a constructive Q2 print.
- Monitoring: re-underwrite on the §10 tripwires; formal re-score each earnings print and on any major media-rights renewal. This verdict is logged as a tracked Synthos call as of 2026-07-03 at $194.42.
- Single biggest risk: a disappointing media-rights renewal in a stock priced for continued escalation.
Provenance & disclosures
- Traceability: 2 KB claims, breadth 2, top skill 1.0 (Invest Like the Best 95, All-In 85), last claim 2025-11-19 — both reconciled to real
claim_ids (cited inline). This is a thin panel; the verdict is explicitly fundamentals- and quant-led. Fabricated conviction is structurally impossible (claim-ID reconciliation). - Data as-of: fundamentals 2026-03-31 (Q1'26) · estimates & prices 2026-07-02/03 · expert claims through 2025-11-19. Forward figures are analyst consensus (FMP), labeled as estimates.
- Capital-structure caveat: TKO is an Up-C entity; the headline Class A market cap (~$14.6B) understates total economic equity. Valuation is anchored on EV/EBITDA and forward diluted EPS.
- Management caveat: the reaffirmed FY26 guidance in §9 is management's own book (SEC 8-K, 2026-05-06), half-weighted by design.
- Not investment advice. Independent research, educational and informational only, never personalized. Hypothetical/forward figures are labeled; the only performance numbers Synthos will headline are the live, real-money Flagship's.
- Version: 2026-07-03. Prior versions available via the deep-dive version dropdown ("based on the info at the time").