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 74 industry peers in the Entertainment industry. TKO has only an average score on both its financial health and profitability. TKO is not valued too expensively and it also shows a decent growth rate.
1. Profitability
1.1 Basic Checks
In the past year TKO was profitable.
TKO had a positive operating cash flow in the past year.
In multiple years TKO reported negative net income over the last 5 years.
TKO had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of -0.63%, TKO is doing good in the industry, outperforming 64.86% of the companies in the same industry.
Looking at the Return On Equity, with a value of -2.00%, TKO is in the better half of the industry, outperforming 68.92% of the companies in the same industry.
With a decent Return On Invested Capital value of 4.37%, TKO is doing good in the industry, outperforming 72.97% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TKO is significantly below the industry average of 23.18%.
The last Return On Invested Capital (4.37%) for TKO is well below the 3 year average (14.73%), which needs to be investigated, but indicates that TKO had better years and this may not be a problem.
| 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's Operating Margin of 25.88% is amongst the best of the industry. TKO outperforms 94.59% of its industry peers.
In the last couple of years the Operating Margin of TKO has grown nicely.
With an excellent Gross Margin value of 68.42%, TKO belongs to the best of the industry, outperforming 81.08% of the companies in the same industry.
| 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 no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 2.86 indicates that TKO is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of TKO (2.86) is better than 74.32% of its industry peers.
TKO has a debt to FCF ratio of 4.52. This is a neutral value as TKO would need 4.52 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 4.52, TKO is doing good in the industry, outperforming 75.68% of the companies in the same industry.
A Debt/Equity ratio of 0.73 indicates that TKO is somewhat dependend on debt financing.
TKO has a Debt to Equity ratio of 0.73. This is comparable to the rest of the industry: TKO outperforms 43.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.73 | ||
| Debt/FCF | 4.52 | ||
| Altman-Z | 2.86 |
ROIC/WACC0.48
WACC9.03%
2.3 Liquidity
A Current Ratio of 0.99 indicates that TKO may have some problems paying its short term obligations.
TKO has a Current ratio (0.99) which is in line with its industry peers.
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
The earnings per share for TKO have decreased strongly by -43.08% in the last year.
TKO shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 36.50% yearly.
EPS 1Y (TTM)-43.08%
EPS 3Y22.79%
EPS 5Y36.5%
EPS Q2Q%317.86%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%92.07%
3.2 Future
TKO is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 19.77% yearly.
TKO is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 18.74% yearly.
EPS Next Y-26.65%
EPS Next 2Y15.45%
EPS Next 3Y16.37%
EPS Next 5Y19.77%
Revenue Next Year61.97%
Revenue Next 2Y42.34%
Revenue Next 3Y24.91%
Revenue Next 5Y18.74%
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 73.67, TKO can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of TKO indicates a somewhat cheap valuation: TKO is cheaper than 64.86% of the companies listed in the same industry.
TKO is valuated expensively when we compare the Price/Earnings ratio to 26.85, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 34.86, the valuation of TKO can be described as expensive.
Based on the Price/Forward Earnings ratio, TKO is valued a bit cheaper than the industry average as 68.92% of the companies are valued more expensively.
TKO's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 34.98.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 73.67 | ||
| Fwd PE | 34.86 |
4.2 Price Multiples
TKO's Enterprise Value to EBITDA is on the same level as the industry average.
64.86% of the companies in the same industry are more expensive than TKO, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 55.8 | ||
| EV/EBITDA | 39.63 |
4.3 Compensation for Growth
TKO has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as TKO's earnings are expected to grow with 16.37% in the coming years.
PEG (NY)N/A
PEG (5Y)2.02
EPS Next 2Y15.45%
EPS Next 3Y16.37%
5. Dividend
5.1 Amount
With a yearly dividend of 0.80%, TKO is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 6.74, TKO pays a better dividend. On top of this TKO pays more dividend than 83.78% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, TKO's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
5.2 History
TKO has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
23.38% of the earnings are spent on dividend by TKO. This is a low number and sustainable payout ratio.
DP23.38%
EPS Next 2Y15.45%
EPS Next 3Y16.37%
184.9
-0.66 (-0.36%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupMedia & Entertainment
GICS IndustryEntertainment
Earnings (Last)
Earnings (Next)
Inst Owners98.13%
Inst Owner Change-3.83%
Ins Owners0.73%
Ins Owner Change-0.13%
Market Cap36.59B
Analysts82.31
Price Target188.06 (1.71%)
Short Float %8.3%
Short Ratio5.66
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.8% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DP23.38%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)262.92%
Min EPS beat(2)-44.96%
Max EPS beat(2)570.8%
EPS beat(4)2
Avg EPS beat(4)128.16%
Min EPS beat(4)-51.56%
Max EPS beat(4)570.8%
EPS beat(8)4
Avg EPS beat(8)68.07%
EPS beat(12)8
Avg EPS beat(12)53.71%
EPS beat(16)11
Avg EPS beat(16)52.67%
Revenue beat(2)2
Avg Revenue beat(2)1.72%
Min Revenue beat(2)1.51%
Max Revenue beat(2)1.93%
Revenue beat(4)2
Avg Revenue beat(4)-6.61%
Min Revenue beat(4)-27.06%
Max Revenue beat(4)1.93%
Revenue beat(8)5
Avg Revenue beat(8)-2.54%
Revenue beat(12)7
Avg Revenue beat(12)-2.07%
Revenue beat(16)9
Avg Revenue beat(16)-1.5%
PT rev (1m)2.36%
PT rev (3m)9.67%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 73.67 | ||
| Fwd PE | 34.86 | ||
| P/S | 14.38 | ||
| P/FCF | 55.8 | ||
| P/OCF | 54.71 | ||
| P/B | 9.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 39.63 |
EPS(TTM)2.51
EY1.36%
EPS(NY)5.3
Fwd EY2.87%
FCF(TTM)3.31
FCFY1.79%
OCF(TTM)3.38
OCFY1.83%
SpS12.85
BVpS20.17
TBVpS-35.75
PEG (NY)N/A
PEG (5Y)2.02
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 | 2.86 |
F-Score4
WACC9.03%
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)-43.08%
EPS 3Y22.79%
EPS 5Y36.5%
EPS Q2Q%317.86%
EPS Next Y-26.65%
EPS Next 2Y15.45%
EPS Next 3Y16.37%
EPS Next 5Y19.77%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%92.07%
Revenue Next Year61.97%
Revenue Next 2Y42.34%
Revenue Next 3Y24.91%
Revenue Next 5Y18.74%
EBIT growth 1Y151.25%
EBIT growth 3Y39.61%
EBIT growth 5Y38.63%
EBIT Next Year54.14%
EBIT Next 3Y37.41%
EBIT Next 5Y28.78%
FCF growth 1Y309.81%
FCF growth 3Y12.83%
FCF growth 5Y22.14%
OCF growth 1Y161.37%
OCF growth 3Y13.55%
OCF growth 5Y20.2%