WWE
World Wrestling Entertainment Inc
TMT
04/22/2019
Presented
| Date | 04/17/2019 |
| Price | $96.11 |
| Market Cap | $7.50B |
| Ent Value | $6.59B |
| P/E Ratio | 86.06x |
| Book Value | $4.05 |
| Div Yield | 0.5% |
| Shares O/S | 78.04M |
| Ave Daily Vol | 911,476 |
| Short Int | 28.44% |
Current
| Price | $125.36 |
| Market Cap | $10.16B |
| World Wrestling Entertainment, Inc. engages in the development, production and marketing of television and pay-per-view event programming and live events and the licensing and sale of consumer products featuring its brands. It operates through the following business segments: Digital Media, Live Events, Consumer Products Division, WWE Studios, and Corporate & Other. The Digital Media segment revenues consist principally of subscriptions to WWE Network, fees for viewing its pay-per-view and video-on-demand programming, and advertising fees. The Live Events segment revenues consist principally of ticket sales and travel packages for live events. The Consumer Products segment revenues consist principally of royalties or license fees related to various WWE themed products such as video games, toys and apparel. The WWE Studios segment revenues consist of amounts earned from the investing in producing and/or distributing of filmed entertainment. The Corporate & Other segment revenues consist of amounts earned from the investing in producing and/or distributing of filmed entertainment. The company was founded by Vincent K. McMahon in 1980 and is headquartered in Stamford, CT. |
Publicly traded companies mentioned herein: Alphabet Inc (GOOG), Comcast Corp (CMCSA), Facebook Inc (FB), Liberty Media Corp-Liberty Formula One (FWONK), Live Nation Entertainment Inc (LYV), Madison Square Garden Co/The (MSG), Marriott International Inc (MAR), Sony Corp (SNE, 6758 JP), Walt Disney Co/The (DIS), World Wrestling Entertainment Inc (WWE)
Highlights
The presenter is long shares of World Wrestling Entertainment Inc (WWE). Despite the stock price tripling over the past year or so, he views the risk/reward as more attractive at its current ~$95 share price than when the price hovered around $30. This is due to more definition around future revenue and the reduced risk that “something could blow up.” Shares currently trade at ~16x the Street’s ~$450MM 2020 EBITDA estimate but he sees 20% – 30% upside to EBITDA based on three “high-probability call options.” These call options, each of which can drive $50MM+ of incremental EBITDA over the consensus estimates, are: upside on international TV renewals, better content monetization, and growth of advertising and sponsorship sales. Once more analysts recognize the upside potential, he expects the EV/EBITDA multiple to expand to a more appropriate level (in line with comps as outlined below), yielding a price target of $150+ per share.
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