TKO GROUP HOLDINGS, INC. (TKO): what the price assumes

In the published model solve dated 2026-Q2, anchored at $184.64, TKO GROUP HOLDINGS, INC. (TKO) is priced for today's economics sustained for ~5.9 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-11.

Generated: 2026-08-30 · Exported: 2026-08-31 · Source: https://boothcheck.com/report/TKO

Headline

FieldValue
TickerTKO
CompanyTKO GROUP HOLDINGS, INC.
Sector / IndustryCommunication Services
Current price$184.64/sh
CompositionMedia rights, production and content 55% / Live events and hospitality 28% / Partnerships and marketing 12% / Consumer products licensing and other 5% / Eliminations -1%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin (value-band context)7.2%
Operating margin today18.8%
Margin compression (value-band)-11.6pp
Must persist for5.9y
Multiple paid39x operating income

The operating-margin figure is value-band context at year 5: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.2% cost of capital; growth searched up to the 25% self-funding ceiling.

How unusual the bet is: elevated (limited comparison data)

ReferenceValue
vs own history-0.52σ
cohort percentile (of 34 peers)79

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset12.77x3expensive
Earnings2.53x3expensive
Relative—0—
Growth—0—

Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.3%); the inversion above states its own rate.

Per-Model Detail (n=6)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$232.980.79xnoFCF base $1.9B, growth 7% (input: historical growth), terminal g 4.0%, WACC 8.3%, 5yr projection
DCF Exit MultipleGrowth$200.670.92xnoExit EV/EBITDA: 23.6x / 25.6x / 27.6x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative——noP/E 30.8x (blended: static sector reference 14x + trailing (TTM) 152x), scenarios: 25.8x / 30.8x / 35.8x (bear / base = reference held flat / bull), EV/EBITDA 13.99x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$13.1114.08xyesBV/sh $44.02, ROE (TTM) 2.8%, ke 9.3%
Two-Stage Excess ReturnAsset$7.7023.98xyes5yr excess ROE then converge to ke=9.3% (excluded from median)
Discounted Future Market CapGrowth$150.311.23xnoRev $5.3B, growth 7% (input: historical growth; tapered), Terminal P/S: 5.5x / 6.6x / 7.7x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$34.205.40xnoEPS $2.85, growth 4% (input: historical EPS growth), PEG=37.74 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$16.2911.33xnoNormalized EBIT (3y avg op income, one-time charges added back) $0.76B × (1−21%) / WACC 8.3% → EPV (no growth)
Residual IncomeAsset$5.6932.45xyesBV $44.02 + 5yr PV of (ROE (TTM) 2.8% − Kₑ 9.3%) × BV; BV grows 1.8%/yr (excluded from median)
Graham NumberAsset$53.133.48xyes√(22.5 × EPS $2.85 × BVPS $44.02) — Graham's conservative floor
EV/EBITDA RelativeRelative——noEBITDA $1.52B × sector EV/EBITDA 9.0x
FCF YieldEarnings$80.652.29xyesFCF $1795.1M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$72.982.53xyesSBC-adj FCF $1.66B (FCF $1.80B − SBC $0.13B) capitalized at Kₑ
Ben Graham FormulaEarnings$39.574.67xyesEPS $2.85 × (8.5 + 2×4.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$14.4612.77xyesBV $44.02 × (ROIC 2.7% / WACC 8.3%)
P/Sales SectorRelative——noRevenue $5.30B × sector P/S 2.0x
PEG Fair ValueRelative$17.2410.71xnoEPS $2.85 × (PEG 1.5 × growth 4.0% (input: historical EPS growth)) → PE 6.1x
Earnings YieldEarnings$30.815.99xnoEPS $2.85 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
UFCoperatingenterprise$1.5b—withheldunresolved no unit value
WWEoperatingenterprise$1.7b—withheldunresolved no unit value
IMGoperatingenterprise$1.4b—withheldunresolved no unit value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

FieldValue
Net debt$4.3b
Net debt / NOPAT (after-tax)5.46x
Net debt / operating income (pre-tax)4.31x
Interest coverage4.1x
Share count CAGR (buyback)-24.8%
Burning cashno

Bullet Takeaways

Bull Case

One number does most of the work here: $7.7 billion. That is what Paramount agreed to pay over seven years for UFC's US media rights, a deal that took effect in January 2026 and puts all 13 numbered events and 30 Fight Nights on Paramount+, with select events simulcast on CBS, and has already been extended to Latin America and Australia. The growth today's price demands is, to an unusual degree, already signed: contracted rights fees step up on a schedule rather than depending on quarterly execution. The first quarter with the deal live showed the effect, with UFC revenue of $401.2 million and total company revenue up 26% year over year to $1.60 billion.

WWE is compounding on its own track. First-quarter WWE revenue rose $84.2 million to $475.7 million, adjusted EBITDA rose 32% to $256.1 million, and the segment margin climbed from 50% to 54%. The sponsorship flywheel the 10-K describes for UFC is running in parallel: the filing attributes the segment's 2025 growth primarily to "$62.9 million of higher partnerships revenue from new sponsors and increases in fees from renewals". Scripted and unscripted fight entertainment are both scarce, year-round, live properties in a media market that pays escalating prices for exactly that scarcity, and TKO controls the two biggest.

The cash follows. Free cash flow runs about $1.8 billion on the engine's trailing data, and management has committed to returning it: a $0.79 quarterly dividend (roughly $150 million per quarter) paid June 30, 2026, an additional $1 billion buyback authorization, and about $1 billion of total capital returned in the first quarter alone. Notably, the forward-looking valuation methods land above today's price; even holding the current EV/EBITDA multiple flat for seven years produces a central read comfortably north of $184. The bull's concession is real leverage and a top-of-peer-group multiple; the reply is that few businesses anywhere have this share of their growth already under contract.

Bear Case

TKO sells spectacle, and the market has decided to pay for it as if it were contracted software revenue. The observation matters before any ratio does: underneath the media-rights escalators sits a hits-and-talent business, dependent on star fighters, wrestlers, and event calendars, that must stay culturally central for the better part of a decade for today's price to work. The numbers then quantify the leap: at about 43 times trailing operating income, the price requires operating growth held near its self-funding ceiling for roughly six and a half years, a persistence only about 24% of comparable fast-growers have managed, on a multiple at the very top of the peer distribution.

The deal-driven growth pattern cuts both ways. The 10-K shows what the business looks like between rights resets: total 2025 revenue increased by "$149.0 million, or 3%, to $4,735.2 million", a modest organic year before the Paramount step-up landed. Media-rights growth arrives in vintages; once a seven-year deal is signed, its escalators are known, and the next leg of the thesis needs new properties or new markets to re-rate. Competition for attention is broad and named in the filing itself, which lists "All Elite Wrestling, Impact Wrestling, Ring of Honor, New Japan Pro-Wrestling, and Consejo Mundial de Lucha Libre" among WWE's competitors, plus every other form of entertainment competing for the same evenings. The IMG segment, meanwhile, earns commission revenue on rights it sells for clients, an agency economics layer thinner than owning the properties outright.

The capital structure leaves little room for a soft stretch. Net debt stands at about $4.1 billion, roughly 4.4 times trailing operating income, with interest covered about 4.3 times, and the filing's own risk language flags that the structure could "require us to refinance in order to accommodate the maturity of the term loans under the Credit Facilities in 2031" and "increase our vulnerability to adverse economic and industry conditions". Layer on a share count that has grown about 6.5% a year over the past two and a half years as stock funded the asset buildout, and the per-share math has been fighting dilution even as the company now pays a dividend and buys back shares on top of the debt load. A decade-long duration bet with 4x leverage prices in very few surprises.

Valuation

At $184.38 (July 10, 2026), the market pays roughly 43 times TKO's trailing company-wide operating income. Run backwards at an 8.2% cost of capital, that embeds operating growth near the self-funding ceiling sustained for about six and a half to seven years; each percentage point of growth moves the horizon about two years, so treat the solve as approximate. Two of the reference points sharpen it: the near-term pace is within what TKO has recently delivered, so the bet is persistence rather than acceleration, and the multiple sits at the very top of the peer distribution. Historically, only about 24% of comparable fast-growers sustained the required pace that long.

The methods split into a clean pattern: only the forward-growth family reaches the price. Its central estimate sits about a third above today's level, and even the exit-multiple approach, which simply holds today's roughly 27x EV/EBITDA flat for seven years, lands above $184; the perpetual cash-flow method, fed by the company's 25% historical growth, lands far higher still. Every static family disagrees: earnings-power methods put the price at about 2.5 times their central estimate, peer multiples at about 3.5 times against a 14x sector median P/E and a 9x sector EV/EBITDA, and asset-value methods further still, though that family says more about merger accounting than economics, since the balance sheet carries $43.63 of book value per share earning a measured 2.7% return, mostly acquired intangibles. The informative spread is earnings power and peers versus growth, and it is wide.

The balance sheet is the constraint on error. Net debt of $4.1 billion runs about 4.4 times trailing operating income of $936 million, with interest covered 4.3 times; the company is strongly cash-generative (about $1.8 billion of trailing free cash flow) and not burning, but the share count has expanded about 6.5% a year over the recent window. The price, in short, is a bet that contracted rights escalators plus live-event economics keep operating income compounding at its ceiling well into the 2030s, with the static methods marking how much of that future is already paid for.

Catalysts

The next print is August 3, 2026, with consensus at $1.45 of EPS for the quarter. The first quarter, reported in early May, set a high bar: revenue of $1.597 billion, up 26%, net income of $249.8 million, adjusted EBITDA of $549.8 million, and EPS of $1.12 against a $1.112 consensus. Management reaffirmed full-year 2026 guidance of $5.675 to $5.775 billion in revenue and $2.240 to $2.290 billion in adjusted EBITDA, so the year is now about pacing against those ranges as the Paramount deal's first full seasons play through.

The distribution story keeps widening. Paramount's $7.7 billion, seven-year US rights agreement for UFC went live in January 2026, putting numbered events and Fight Nights on Paramount+ with CBS simulcasts, and the partnership has been expanded to Latin America, including Brazil, and Australia for 2026. International rights renewals and the ramp of the WWE calendar (the first quarter benefited from a Saudi-hosted Royal Rumble) are the incremental revenue events to track.

Capital returns now run on a schedule: a $0.79 quarterly dividend, roughly $150 million per quarter, was paid June 30, 2026, the board added a $1 billion repurchase authorization, and about $1 billion of capital went back to holders in the first quarter. The street remains ahead of the tape, with the average analyst target near $229, effectively an endorsement of the same forward-growth lens that is the only valuation family reaching today's price.

Peer Cohorts (Per Segment, With Filing Citations)

UFC (reported)

WWE (reported)

IMG (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Paramount press release; CBS News · TKO Q1 2026 results · Paramount and TKO press releases; CBS News · TKO Q1 2026 results, Yahoo Sports · TKO Q1 2026 results, POST Wrestling · TKO 8-K and Simply Wall St coverage · Public.com earnings calendar · TKO Q1 2026 results, TipRanks · Paramount and TKO press releases · POST Wrestling · TKO 8-K; Simply Wall St · Public.com

View the full interactive TKO report on boothcheck