TKO Group Holdings Inc (NYSE:TKO) Shows Strong Technical and Fundamental Momentum

For investors looking to find stocks with high potential for major growth, a mixed method of strict technical filtering and fundamental momentum study can be a useful instrument. One such technique uses Mark Minervini's Trend Template to sort for stocks in solid, confirmed uptrends, then adds a High Growth Momentum (HGM) score to confirm the core business shows the speeding earnings and sales growth that usually supports continued price gains. This two-part method tries to find companies that are both technically healthy and fundamentally set for growth.

TKO GROUP HOLDINGS INC (NYSE:TKO) appears as a pick from a filter created on this idea. The company, made from the combination of UFC and WWE, runs a collection of live sports and entertainment assets, including the Professional Bull Riders (PBR) and the worldwide sports marketing agency IMG. Its way of doing business focuses on media rights, live event production, sponsorship, and consumer goods, placing it where content and live experience meet.

Technical Health: Matching the Minervini Trend Template

Minervini's Trend Template is made to remove weak stocks and find those in a strong Stage 2 climb, where most of a stock's large gains usually happen. TKO's present price chart shows a clear match with these technical rules:

• Moving Averages in an Uptrend: The stock price ($203.65) trades well above its rising 50-day ($195.67), 150-day ($186.26), and 200-day ($178.59) simple moving averages (SMAs). This order, with the shorter-term averages above the longer-term ones, confirms a solid and orderly uptrend across several time periods.
• Nearness to Highs: A main idea of the Minervini method is to focus on strength, not low price. TKO is now trading within 6.6% of its 52-week high of $218.11, showing it is a leader and has momentum. It is also more than 50% above its 52-week low, meeting the template's need for major recovery and space from lows.
• Better Relative Strength: With a ChartMill Relative Strength (CRS) score of 86.25, TKO is doing better than about 86% of all stocks in the market. High relative strength is a sign of market leaders and is important in the Minervini plan, as it shows institutional buying and a stock's capacity to do well even in a good market.

This technical view indicates TKO is in a verified uptrend with solid momentum, fitting the strict entry rules that build the base of trend-following plans.

Fundamental Momentum: The Argument for High Growth

While a healthy chart is necessary, the Minervini thinking stresses that the largest stock winners are nearly always supported by strong fundamental speed. The High Growth Momentum score checks this part, and TKO's recent financial numbers show several good points:

• Rapid Sales Growth: The company has shown notable sales speed increase. The latest quarter had year-over-year sales growth of over 64%, a large rise from the mid-single-digit growth rates in the earlier quarters. This jump is mostly due to the combination and new media rights agreements, giving a clear fundamental driver.
• Earnings Return and Cash Flow Creation: After a time of combination-related expenses, earnings are showing signs of strong return. The last quarter's EPS grew almost 68% year-over-year. More notably, free cash flow per share has risen very fast, with TTM growth over 240%, showing healthy operational effectiveness and financial condition after the combination.
• Analyst Views: While short-term EPS guesses have seen some lowering, analysts have raised their sales expectations for the next year over the past three months. This suggests belief in the company's sales growth path from its joined assets and new projects.

For a high-growth investor, these numbers are not just figures; they represent the "large earnings [that] draw large notice" Minervini often mentions. The mix of speeding sales, returning profits, and healthy cash flow creates a fundamental story that can maintain and lengthen a technical uptrend.

Technical Condition Summary

ChartMill's separate technical report gives TKO a very high score of 10 out of 10, noting its steady results across both short and long-term periods. The report states the stock is doing better than most of its peers in the Entertainment field and is trading in the higher part of its 52-week range. While the long-term trend is scored positive, the short-term trend is now neutral, suggesting the stock may be in a time of pause within its larger climb. It is important to note that the report states the setup quality is now low because of recent price swings, meaning that while the trend is very good, investors might look for a clearer entry point on a move back to support. A complete list of support and resistance levels can be seen in the detailed technical analysis report.

Conclusion

TKO Group Holdings shows a situation where a clear technical setup meets a fundamental growth story. Its chart fits the strict rules of the Minervini Trend Template, showing a stock in a solid uptrend with leader-level relative strength. At the same time, its post-combination financials, noted by fast-rising sales, returning earnings, and fast free cash flow growth, appeal to the needs of high-growth momentum investors looking for companies with speeding business activity. This link between price movement and core business momentum is exactly what mixed filtering methods try to discover.

For investors wanting to look at other stocks that fit this mix of technical strictness and fundamental growth momentum, the filter that found TKO can be found here: High Growth Momentum + Trend Template Screen.

Disclaimer: This article is for information and learning only. It is not meant as investment guidance, a suggestion, or an offer to buy or sell any security. The study is based on given data and certain techniques; past results do not show future outcomes. Investors should do their own study and think about their money situation, risk comfort, and investment goals before making any investment choice. Please read our full disclaimer and terms of use for more information.