TKO GROUP HOLDINGS INC (TKO) Stock Fundamental Analysis
NYSE:TKO - New York Stock Exchange, Inc. - US87256C1018 - Common Stock - Currency: USD
TKO gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 71 industry peers in the Entertainment industry. TKO has an average financial health and profitability rating. TKO is growing strongly while it is still valued neutral. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year TKO was profitable.
In the past year TKO had a positive cash flow from operations.
Of the past 5 years TKO 4 years were profitable.
Each year in the past 5 years TKO had a positive operating cash flow.
1.2 Ratios
The Return On Assets of TKO (-0.63%) is better than 62.12% of its industry peers.
TKO's Return On Equity of -2.00% is fine compared to the rest of the industry. TKO outperforms 63.64% of its industry peers.
With a decent Return On Invested Capital value of 4.37%, TKO is doing good in the industry, outperforming 72.73% of the companies in the same industry.
TKO had an Average Return On Invested Capital over the past 3 years of 14.73%. This is significantly below the industry average of 91.11%.
The 3 year average ROIC (14.73%) for TKO is well above the current ROIC(4.37%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.63% | ||
| ROE | -2% | ||
| ROIC | 4.37% |
ROA(3y)9.63%
ROA(5y)9.36%
ROE(3y)28.1%
ROE(5y)29.24%
ROIC(3y)14.73%
ROIC(5y)14.52%
1.3 Margins
TKO has a Operating Margin of 25.88%. This is amongst the best in the industry. TKO outperforms 95.45% of its industry peers.
TKO's Operating Margin has improved in the last couple of years.
TKO has a Gross Margin of 68.42%. This is amongst the best in the industry. TKO outperforms 80.30% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 25.88% | ||
| PM (TTM) | N/A | ||
| GM | 68.42% |
OM growth 3Y16.54%
OM growth 5Y23.24%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TKO is creating some value.
TKO has more shares outstanding than it did 1 year ago.
TKO has more shares outstanding than it did 5 years ago.
The debt/assets ratio for TKO has been reduced compared to a year ago.
2.2 Solvency
TKO has an Altman-Z score of 2.26. This is not the best score and indicates that TKO is in the grey zone with still only limited risk for bankruptcy at the moment.
TKO's Altman-Z score of 2.26 is fine compared to the rest of the industry. TKO outperforms 71.21% of its industry peers.
The Debt to FCF ratio of TKO is 4.52, which is a neutral value as it means it would take TKO, 4.52 years of fcf income to pay off all of its debts.
TKO's Debt to FCF ratio of 4.52 is fine compared to the rest of the industry. TKO outperforms 72.73% of its industry peers.
TKO has a Debt/Equity ratio of 0.73. This is a neutral value indicating TKO is somewhat dependend on debt financing.
TKO has a Debt to Equity ratio (0.73) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | 4.52 | ||
| Altman-Z | 2.26 |
ROIC/WACC0.48
WACC9.12%
2.3 Liquidity
TKO has a Current Ratio of 0.99. This is a bad value and indicates that TKO is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Current ratio value of 0.99, TKO perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
TKO has a Quick Ratio of 0.99. This is a bad value and indicates that TKO is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of TKO (0.99) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
TKO shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 57.66%, which is quite impressive.
TKO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 16.71% yearly.
The Revenue has grown by 29.69% in the past year. This is a very strong growth!
TKO shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 12.48% yearly.
EPS 1Y (TTM)57.66%
EPS 3Y16.87%
EPS 5Y16.71%
EPS Q2Q%-65.43%
Revenue 1Y (TTM)29.69%
Revenue growth 3Y19.8%
Revenue growth 5Y12.48%
Sales Q2Q%51.68%
3.2 Future
Based on estimates for the next years, TKO will show a very strong growth in Earnings Per Share. The EPS will grow by 20.53% on average per year.
Based on estimates for the next years, TKO will show a quite strong growth in Revenue. The Revenue will grow by 9.75% on average per year.
EPS Next Y-99.8%
EPS Next 2Y15.96%
EPS Next 3Y26.75%
EPS Next 5Y20.53%
Revenue Next Year7.75%
Revenue Next 2Y11.52%
Revenue Next 3Y15.26%
Revenue Next 5Y9.75%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 36.76, the valuation of TKO can be described as expensive.
69.70% of the companies in the same industry are more expensive than TKO, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of TKO to the average of the S&P500 Index (29.63), we can say TKO is valued slightly more expensively.
Based on the Price/Forward Earnings ratio of 47.44, the valuation of TKO can be described as expensive.
TKO's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TKO is cheaper than 65.15% of the companies in the same industry.
TKO's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.76 | ||
| Fwd PE | 47.44 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as TKO.
Based on the Price/Free Cash Flow ratio, TKO is valued a bit cheaper than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 41.36 | ||
| EV/EBITDA | 30.83 |
4.3 Compensation for Growth
The decent profitability rating of TKO may justify a higher PE ratio.
TKO's earnings are expected to grow with 26.75% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)2.2
EPS Next 2Y15.96%
EPS Next 3Y26.75%
5. Dividend
5.1 Amount
No dividends for TKO!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
158.82
-4.99 (-3.05%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners94.61%
Inst Owner Change-0.05%
Ins Owners5.75%
Ins Owner Change1.41%
Market Cap27.12B
Analysts83.48
Price Target160.32 (0.94%)
Short Float %10.5%
Short Ratio6.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0.48
Dividend Growth(5Y)N/A
DP23.38%
Div Incr Years1
Div Non Decr Years11
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)276.51%
Min EPS beat(2)-17.78%
Max EPS beat(2)570.8%
EPS beat(4)2
Avg EPS beat(4)134.95%
Min EPS beat(4)-51.56%
Max EPS beat(4)570.8%
EPS beat(8)4
Avg EPS beat(8)71.47%
EPS beat(12)8
Avg EPS beat(12)55.98%
EPS beat(16)11
Avg EPS beat(16)54.37%
Revenue beat(2)2
Avg Revenue beat(2)5.6%
Min Revenue beat(2)1.93%
Max Revenue beat(2)9.26%
Revenue beat(4)2
Avg Revenue beat(4)-4.67%
Min Revenue beat(4)-27.06%
Max Revenue beat(4)9.26%
Revenue beat(8)5
Avg Revenue beat(8)-1.57%
Revenue beat(12)7
Avg Revenue beat(12)-1.42%
Revenue beat(16)9
Avg Revenue beat(16)-1.02%
PT rev (1m)4.62%
PT rev (3m)13.27%
EPS NQ rev (1m)1.02%
EPS NQ rev (3m)1.02%
EPS NY rev (1m)364.55%
EPS NY rev (3m)-96.44%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.04%
Revenue NY rev (3m)0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 36.76 | ||
| Fwd PE | 47.44 | ||
| P/S | 10.66 | ||
| P/FCF | 41.36 | ||
| P/OCF | 40.55 | ||
| P/B | 6.79 | ||
| P/tB | N/A | ||
| EV/EBITDA | 30.83 |
EPS(TTM)4.32
EY2.72%
EPS(NY)3.35
Fwd EY2.11%
FCF(TTM)3.84
FCFY2.42%
OCF(TTM)3.92
OCFY2.47%
SpS14.9
BVpS23.37
TBVpS-41.43
PEG (NY)N/A
PEG (5Y)2.2
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.63% | ||
| ROE | -2% | ||
| ROCE | 5.5% | ||
| ROIC | 4.37% | ||
| ROICexc | 4.47% | ||
| ROICexgc | 84.04% | ||
| OM | 25.88% | ||
| PM (TTM) | N/A | ||
| GM | 68.42% | ||
| FCFM | 25.78% |
ROA(3y)9.63%
ROA(5y)9.36%
ROE(3y)28.1%
ROE(5y)29.24%
ROIC(3y)14.73%
ROIC(5y)14.52%
ROICexc(3y)24.53%
ROICexc(5y)26.42%
ROICexgc(3y)44.43%
ROICexgc(5y)38.81%
ROCE(3y)22.69%
ROCE(5y)22.64%
ROICexcg growth 3Y11.84%
ROICexcg growth 5Y-0.18%
ROICexc growth 3Y-54.96%
ROICexc growth 5Y-41.05%
OM growth 3Y16.54%
OM growth 5Y23.24%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3YN/A
GM growth 5YN/A
F-Score4
Asset Turnover0.2
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | 4.52 | ||
| Debt/EBITDA | 2.94 | ||
| Cap/Depr | 3.88% | ||
| Cap/Sales | 0.51% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 67.26% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.99 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 2.26 |
F-Score4
WACC9.12%
ROIC/WACC0.48
Cap/Depr(3y)96.87%
Cap/Depr(5y)79.58%
Cap/Sales(3y)7.32%
Cap/Sales(5y)6.4%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)57.66%
EPS 3Y16.87%
EPS 5Y16.71%
EPS Q2Q%-65.43%
EPS Next Y-99.8%
EPS Next 2Y15.96%
EPS Next 3Y26.75%
EPS Next 5Y20.53%
Revenue 1Y (TTM)29.69%
Revenue growth 3Y19.8%
Revenue growth 5Y12.48%
Sales Q2Q%51.68%
Revenue Next Year7.75%
Revenue Next 2Y11.52%
Revenue Next 3Y15.26%
Revenue Next 5Y9.75%
EBIT growth 1Y151.25%
EBIT growth 3Y39.61%
EBIT growth 5Y38.63%
EBIT Next Year54.02%
EBIT Next 3Y31.9%
EBIT Next 5Y21.76%
FCF growth 1Y309.81%
FCF growth 3Y12.83%
FCF growth 5Y22.14%
OCF growth 1Y161.37%
OCF growth 3Y13.55%
OCF growth 5Y20.2%