TKO Group Holdings, Inc. (TKO) Stock Analysis and Metrics

TKO Group Holdings

NYSE: TKO

$180.70 ▲ +1.27 (+0.71%)

At close: Jul 24, 2026 · 3:59 PM UTC

Financial Ratios

Market Cap20.91 Bn

P/E36.32

P/S4.13

Div. Yield0.02

ROIC (Qtr)0.06

Total Debt (Qtr)4.64 Bn

Revenue Growth (1y) (Qtr)25.86

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About

TKO is a premium sports and entertainment company. It owns the Ultimate Fighting Championship (UFC), World Wrestling Entertainment (WWE), Professional Bull Riders (PBR) and holds a joint venture interest in Zuffa Boxing. Through the acquisition of IMG and On Location, TKO also operates a global sports marketing agency and a premium experiential hospitality provider. The company stages more than 500 live events each year, distributes media rights to broadcasters worldwide and offers hospitality packages for major sporting and entertainment spectacles.

TKO generates revenue from 4 principal activities. Media rights, production and content includes licensing live events and original programming to domestic and international broadcasters and distributing sports programming on behalf of third party rights holders. Live events and hospitality derives income from ticket sales, site fees, VIP packages and the provision of curated travel and accommodation experiences via On Location. Partnerships and marketing comes from the sale of in venue and in broadcast advertising, brand integration, digital impressions and sponsorship fees earned by IMG. Consumer products licensing consists of royalties and license fees from branded merchandise, video games, apparel and related goods sold through retail and e commerce channels.

The company operates through the following segments:

• Media rights, production and content: This segment licenses live events and original programming to broadcasters and distributors, produces short and long form filmed entertainment and acts as a global distributor of sports programming on behalf of leagues, federations and events.

• Live events and hospitality: This segment promotes and stages UFC, WWE and PBR events, sells tickets and hospitality packages, collects site fees and provides premium experiential services through On Location for events such as the Olympics, FIFA World Cup and Super Bowl.

• Partnerships and marketing: This segment sells in venue and in broadcast advertising, secures brand integration opportunities, delivers digital impressions and generates sponsorship and consulting fees for clients including major sports leagues and corporate brands via IMG’s global sales network.

• Consumer products licensing: This segment licenses UFC, WWE and PBR trademarks to manufacturers of video games, apparel, equipment, trading cards and toys, collects royalties and license fees and oversees direct to consumer sales through partnerships with retailers such as Walmart, Target and Fanatics.

TKO holds a distinctive position in the sports and entertainment landscape by combining owned intellectual property with global media distribution and experiential hospitality capabilities. Its portfolio of UFC, WWE and PBR provides exclusive live event content that competitors such as Bellator MMA, ONE Championship and All Elite Wrestling cannot match. Compared with traditional sports marketing agencies like WME and CAA, TKO’s internal control over content production and rights enables quicker decision making and more consistent brand integration. The company’s ability to offer end to end solutions from content creation to ticketed hospitality gives it a competitive edge over firms that specialize in only one of these areas.

TKO serves a diverse customer base that includes sports fans, media distributors, corporate sponsors and hospitality clients. Its media rights partners comprise Paramount, Disney’s ESPN, Netflix, Versant, the CW, Rogers Sportsnet, WBDSports and DAZN. The company has marketing alliances with brands such as Meta, Ram Trucks, Anheuser Busch, IBM, Procter & Gamble, Monster Energy, Cuervo, Total Wireless, Wingstop and Slim Jim. Through IMG, TKO works with sports entities including the English Premier League, Major League Soccer, the R&A, Wimbledon, the DP World Tour, the ATP and WTA Tours, the National Football League, CONMEBOL, Euroleague Basketball and the Saudi Pro League. On Location provides official ticket and experience packages for events like the Olympic Games, FIFA World Cup, Super Bowl and NCAA Final Four.

Investment Thesis

▲ Bull case

TKO is positioned to capitalize on expanding global media rights partnerships that are significantly underappreciated by the market, particularly through the incremental value of WWE's archive and NXT PLEs with Netflix and The CW. The company has successfully monetized previously underutilized content categories, with the WWE Archive deal generating immediate revenue from decades of premium content and NXT PLEs moving to The CW as the exclusive home, adding 20 live broadcasts annually to a partnership that already makes NXT the network's top-rated program among key demographics. These deals represent pure incremental margin expansion since they leverage existing IP with minimal additional production cost, and the market is overlooking how this content monetization strategy will scale globally as TKO secures similar arrangements in EMEA and APAC territories for Zuffa Boxing and other properties. The IMG-led distribution engine is actively signing media rights deals in over 15 additional territories for Zuffa Boxing alone, creating a recurring revenue stream that will compound as live events move off the Meta APEX in Las Vegas and onto regional tours, directly translating viewership growth into higher sponsorship and partnership revenue across all TKO properties.
The financial incentive package (FIP) pipeline is a structural growth driver that the market is failing to fully value, evidenced by TKO's ability to secure multiyear renewals at higher per-event fees despite geopolitical noise, with Baku and Abu Dhabi serving as proof points of resilient demand. Management explicitly noted that partners in Saudi Arabia confirmed their commitment to TKO properties remains unwavering following PIF's withdrawal from LIV Golf, and the company expects six additional Middle East events in 2026 beyond the June doubleheader, all carrying meaningful FIPs at increased rates. This is not temporary demand but a strategic shift where governments and private entities are actively bidding for TKO events to drive tourism and global visibility, creating a defensible moat around TKO's live events business that is insulated from consumer discretionary spending fluctuations. The market is ignoring how FIPs function as high-flow-through revenue with minimal incremental cost—evident in the WWE segment where live events and hospitality revenue grew 62% year-over-year in Q1 despite only a 22% overall revenue increase—highlighting the operating leverage embedded in this model that will drive EBITDA expansion well beyond current guidance as FIPs scale globally.
TKO's capital return program represents a significant undervalued catalyst, with the company deploying approximately $1 billion in capital to equity holders in Q1 alone through dividends and share repurchases, signaling management's conviction in intrinsic value despite macro uncertainty. The Board authorized an additional $1 billion share repurchase, bringing total authorization to $3 billion, and TKO is executing this via an ASR for $800 million and a 10b5-1 plan for $200 million, funded by a $900 million term loan add-on and cash on hand. This aggressive return of capital occurs while maintaining a net leverage ratio of 2.3x and targeting free cash flow conversion in excess of 60%, reflecting a balance sheet that can sustain both growth investments and shareholder returns. The market is underestimating how TKO's defensive business model—characterized by high contracted revenue from multiyear media rights, global partnerships, and FIPs with annual escalators—generates predictable cash flow that supports this capital return, creating a floor for valuation that is not being reflected in the current stock price dislocation management referenced.

TKO is positioned to capitalize on expanding global media rights partnerships that are significantly underappreciated by the market, particularly through the incremental value of WWE's archive and NXT PLEs with Netflix and The CW. The company has successfully monetized previously underutilized content categories, with the WWE Archive deal generating immediate revenue from decades of premium content and NXT PLEs moving to The CW as the exclusive home, adding 20 live broadcasts annually to a partnership that already makes NXT the network's top-rated program among key demographics. These deals represent pure incremental margin expansion since they leverage existing IP with minimal additional production cost, and the market is overlooking how this content monetization strategy will scale globally as TKO secures similar arrangements in EMEA and APAC territories for Zuffa Boxing and other properties. The IMG-led distribution engine is actively signing media rights deals in over 15 additional territories for Zuffa Boxing alone, creating a recurring revenue stream that will compound as live events move off the Meta APEX in Las Vegas and onto regional tours, directly translating viewership growth into higher sponsorship and partnership revenue across all TKO properties.
The financial incentive package (FIP) pipeline is a structural growth driver that the market is failing to fully value, evidenced by TKO's ability to secure multiyear renewals at higher per-event fees despite geopolitical noise, with Baku and Abu Dhabi serving as proof points of resilient demand. Management explicitly noted that partners in Saudi Arabia confirmed their commitment to TKO properties remains unwavering following PIF's withdrawal from LIV Golf, and the company expects six additional Middle East events in 2026 beyond the June doubleheader, all carrying meaningful FIPs at increased rates. This is not temporary demand but a strategic shift where governments and private entities are actively bidding for TKO events to drive tourism and global visibility, creating a defensible moat around TKO's live events business that is insulated from consumer discretionary spending fluctuations. The market is ignoring how FIPs function as high-flow-through revenue with minimal incremental cost—evident in the WWE segment where live events and hospitality revenue grew 62% year-over-year in Q1 despite only a 22% overall revenue increase—highlighting the operating leverage embedded in this model that will drive EBITDA expansion well beyond current guidance as FIPs scale globally.
TKO's capital return program represents a significant undervalued catalyst, with the company deploying approximately $1 billion in capital to equity holders in Q1 alone through dividends and share repurchases, signaling management's conviction in intrinsic value despite macro uncertainty. The Board authorized an additional $1 billion share repurchase, bringing total authorization to $3 billion, and TKO is executing this via an ASR for $800 million and a 10b5-1 plan for $200 million, funded by a $900 million term loan add-on and cash on hand. This aggressive return of capital occurs while maintaining a net leverage ratio of 2.3x and targeting free cash flow conversion in excess of 60%, reflecting a balance sheet that can sustain both growth investments and shareholder returns. The market is underestimating how TKO's defensive business model—characterized by high contracted revenue from multiyear media rights, global partnerships, and FIPs with annual escalators—generates predictable cash flow that supports this capital return, creating a floor for valuation that is not being reflected in the current stock price dislocation management referenced.

▼ Bear case

TKO faces significant margin pressure in the IMG segment that management is not adequately addressing, with adjusted EBITDA margin remaining flat at 15% despite 38% revenue growth, signaling structural inefficiencies in the core sports marketing agency business. The IMG segment's profitability is being artificially inflated by the one-time boost from the Milano Cortina Winter Olympics experiential hospitality program, which drove the revenue increase but required substantial pre-spend for LA28 that is only partially offsetting the impact, leaving the underlying IMG business stagnant. Management acknowledged that revenue at the IMG business increased only slightly year-over-year as new production agreements and boxing commissions were offset by the absence of the Arabian Gulf Cup, a biannual event, revealing a lack of organic growth in the legacy agency operations. The market may be ignoring how IMG's industry-leading expertise in advisory appointments and event management is not translating to margin expansion due to rising costs from global distribution of boxing superfights and increased personnel expenses, creating a drag on consolidated EBITDA that could persist if the LA28 experiential hospitality sales do not materialize as expected.
The UFC segment's growth is increasingly dependent on volatile financial incentive packages and international events that carry higher cost structures and execution risks, making the projected EBITDA margin expansion overly optimistic. Management admitted that UFC Freedom 250 at the White House will incur approximately $30 million in losses despite sold-out marketing inventory, and the segment benefited in prior periods from one-time FIPs like the Saudi Arabia Fight Night in Q1 2025 that are not recurring at the same scale. The shift in event mix—Q1 2026 had six Fight Nights versus eight in Q1 2025—combined with higher athlete production costs from events like UFC 324 under the new Paramount deal, created a scenario where adjusted EBITDA margin remained flat at 63% despite a 12% revenue increase, indicating that media rights step-ups are being absorbed by rising direct operating expenses. The market is overlooking how the UFC's reliance on hosting high-profile international events in regions with logistical complexities (e.g., Baku, Belgrade, Philadelphia) introduces execution risk that could delay or diminish the expected margin uplift, especially as fighter compensation continues to grow at a meaningful clip and becomes a larger fixed cost base.
TKO's growth narrative is exposed to slowing fan engagement and monetization challenges in key domestic markets, particularly evident in the partnerships and marketing revenue growth deceleration that management dismissed as timing-related but reflects deeper monetization difficulties. Partnerships and marketing revenue grew only 4% for UFC and 2% for WWE in Q1 despite strong viewership and engagement metrics, with Andrew Schleimer attributing the UFC increase solely to timing from two fewer events and Mark Shapiro acknowledging that WWE's international events (12 in Q1) are harder to monetize domestically due to restrictions and lower margin profiles. This suggests that while global fan base expansion is occurring through international tours and events like the European tour, the company is struggling to convert that engagement into proportional sponsorship and partnership revenue growth, especially as fan-facing monetization (ticket pricing, sponsorship integration) faces vocal criticism and may hit elasticity limits. The market is ignoring how the success of WWE's WrestleMania 42—despite record attendance and 32 total partners—required a strategic increase in NXT nontelevised events to develop talent, indicating underlying concerns about main roster readiness and creative execution that could undermine long-term partnership value if fan dissatisfaction with commercial load and celebrity usage translates to reduced engagement over time.

TKO faces significant margin pressure in the IMG segment that management is not adequately addressing, with adjusted EBITDA margin remaining flat at 15% despite 38% revenue growth, signaling structural inefficiencies in the core sports marketing agency business. The IMG segment's profitability is being artificially inflated by the one-time boost from the Milano Cortina Winter Olympics experiential hospitality program, which drove the revenue increase but required substantial pre-spend for LA28 that is only partially offsetting the impact, leaving the underlying IMG business stagnant. Management acknowledged that revenue at the IMG business increased only slightly year-over-year as new production agreements and boxing commissions were offset by the absence of the Arabian Gulf Cup, a biannual event, revealing a lack of organic growth in the legacy agency operations. The market may be ignoring how IMG's industry-leading expertise in advisory appointments and event management is not translating to margin expansion due to rising costs from global distribution of boxing superfights and increased personnel expenses, creating a drag on consolidated EBITDA that could persist if the LA28 experiential hospitality sales do not materialize as expected.
The UFC segment's growth is increasingly dependent on volatile financial incentive packages and international events that carry higher cost structures and execution risks, making the projected EBITDA margin expansion overly optimistic. Management admitted that UFC Freedom 250 at the White House will incur approximately $30 million in losses despite sold-out marketing inventory, and the segment benefited in prior periods from one-time FIPs like the Saudi Arabia Fight Night in Q1 2025 that are not recurring at the same scale. The shift in event mix—Q1 2026 had six Fight Nights versus eight in Q1 2025—combined with higher athlete production costs from events like UFC 324 under the new Paramount deal, created a scenario where adjusted EBITDA margin remained flat at 63% despite a 12% revenue increase, indicating that media rights step-ups are being absorbed by rising direct operating expenses. The market is overlooking how the UFC's reliance on hosting high-profile international events in regions with logistical complexities (e.g., Baku, Belgrade, Philadelphia) introduces execution risk that could delay or diminish the expected margin uplift, especially as fighter compensation continues to grow at a meaningful clip and becomes a larger fixed cost base.
TKO's growth narrative is exposed to slowing fan engagement and monetization challenges in key domestic markets, particularly evident in the partnerships and marketing revenue growth deceleration that management dismissed as timing-related but reflects deeper monetization difficulties. Partnerships and marketing revenue grew only 4% for UFC and 2% for WWE in Q1 despite strong viewership and engagement metrics, with Andrew Schleimer attributing the UFC increase solely to timing from two fewer events and Mark Shapiro acknowledging that WWE's international events (12 in Q1) are harder to monetize domestically due to restrictions and lower margin profiles. This suggests that while global fan base expansion is occurring through international tours and events like the European tour, the company is struggling to convert that engagement into proportional sponsorship and partnership revenue growth, especially as fan-facing monetization (ticket pricing, sponsorship integration) faces vocal criticism and may hit elasticity limits. The market is ignoring how the success of WWE's WrestleMania 42—despite record attendance and 32 total partners—required a strategic increase in NXT nontelevised events to develop talent, indicating underlying concerns about main roster readiness and creative execution that could undermine long-term partnership value if fan dissatisfaction with commercial load and celebrity usage translates to reduced engagement over time.

Consolidation Items Breakdown of Revenue (2025)

Peer Comparison

Companies in the Entertainment

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	NFLX	Netflix Inc	294.45 Bn	21.57	6.09	14.31 Bn
2	DIS	Walt Disney Co	167.66 Bn	13.59	1.72	47.36 Bn
3	WBD	Warner Bros. Discovery, Inc.	64.42 Bn	-37.72	1.73	33.96 Bn
4	LYV	Live Nation Entertainment, Inc.	41.20 Bn	-100.41	1.61	8.51 Bn
5	FWONA	Liberty Media Corp	29.74 Bn	1,239.22	6.27	5.02 Bn
6	ROKU	Roku, Inc	20.95 Bn	103.98	4.22	-
7	FOX	Fox Corp	20.92 Bn	12.23	1.29	6.61 Bn
8	TKO	TKO Group Holdings, Inc.	20.91 Bn	36.32	4.13	4.64 Bn

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Investment Thesis

Geographical Breakdown of Revenue (2025)

Consolidation Items Breakdown of Revenue (2025)

Peer Comparison

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Investment Thesis

Geographical Breakdown of Revenue (2025)

Consolidation Items Breakdown of Revenue (2025)

Peer Comparison

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