7→8: Best DCF support in watchlist. P(above) 94.1%, DCF FV $267 vs $201 = 32.9% upside. WWE/UFC media rights cycle: Netflix WWE deal demonstrating IP monetization flywheel. Above 200dma. Conv-8 criteria all met: thesis validated (media supercycle) ✓ + catalyst (media rights renewals, live event growth) ✓ + upside ≥20% ✓ + DCF P(above) >40% ✓ + above 200dma ✓. Upgrade trigger remains: price at/below $195 for full sizing.
Weekly re-eval Mar 8. TKO at $202.68, down -9.5% on Mar 6 (sharpest drop this week among top candidates). Key new data from earnings call: 2026 FCF will be pressured by World Cup distributions and back-weighted Paramount deal payment schedule (negative working capital effects). This is TIMING not thesis. Media rights are contractual ($7.7B UFC/Paramount + WWE/Netflix/ESPN). Long-term EBITDA guide $2.27B intact. Reduce conviction 8→7 due to near-term FCF optics and macro risk-off. Entry target lowered to $185-195 on continued weakness. At $202 not a buy yet — wait for further pullback. Target $260, stop $175.
FY2025 10-K confirms media rights thesis completely. UFC/Paramount 7yr exclusive (2026+) and WWE/Netflix+ESPN locked in. 2026 guidance: Rev $5.7B, EBITDA $2.27B (+42% YoY) is contractual not speculative. FCF $1.16B, margin 33% (up from 22%). WWE segment EBITDA +32%, UFC +6%. Both margins expanding. Net debt ~$2.95B at 1.9x EBITDA - manageable. $1B buyback launching Mar 2026 is shareholder-friendly. IMGOn Location integration working (margin -2%→12%). 2026 is the media rights reset year - every major deal steps up simultaneously.
Fair Value Distribution — percentile bands
94.1% of simulations place fair value above current price
WHAT IS PRICED IN
Revenue-Based Reverse DCF
4.3%/yr
±3.8% · revenue growth to justify current price
FCF-Based Reverse DCF
4.2%/yr
±3.0% · FCF growth to justify current price
THE GAP
Market pricing margin expansion or capex normalization
KEY VALUE DRIVERS
Spearman correlation — what moves this valuation most
WWE+UFC under one roof is a moat. Live sports rights are the last remaining linear TV hedge and streaming's ultimate premium content. Saudi/international expansion is early innings with massive monetization runway.
FCF pressured in 2026 by World Cup timing and Paramount deal economics. At $227, above $190 entry target. Near-term FCF yield ~3% makes valuation sensitive to execution. Stagflation hurts discretionary consumer spend.
Key talent defection, streaming deal restructuring at worse terms, UFC/WWE cross-brand confusion damaging sponsorship rates
Updated Mar 12
FY2025: Rev .735B (-3% YoY, Olympics timing), Adj EBITDA .585B (+47%), net income M vs. M loss prior year, FCF .159B. UFC .502B (+7%), WWE .709B (+22%). 2026 guidance: Rev .675-5.775B (+21%), EBITDA ....
Falcon deep read: Est ~.9B revenue post-Endeavor acquisition (UFC ~M, WWE ~M, IMG ~M, On Location ~M, PBR ~M). 500+ events, 1B+ households, 2B+ fans. Media rights appreciation (Paramount 7yr UFC, Netf...
FY2025: Rev .735B (-3% YoY due to Olympics comp), Adj EBITDA .585B (+47%), margin 33% vs 22%. UFC +7% rev, 57% margins. WWE +22% rev, 52% margins. FY2026 guidance: Rev .675-5.775B (+21%), EBITDA .240-...
TKO 2025: UFC/WWE consolidated, IMG/On Location/PBR added, media rights renewing at higher valuations. International growth runway. Discretionary spending sensitivity and talent retention risks.