* Note: Prices are in Million (M) USD.
Description:
TKO Group Holdings, Inc. is a sports and entertainment company. The company is headquartered in New York, New York.
These criteria used Company's Cash, EBITDA and Debt balance to determines its fair value:
Cash : $859 M
Debt : $2,787 M
EBITDA : $1,210 M
Net Debt (Debt - Cash): $1,929 M
Since Net Debt is covered by EBITDA within 2 years, 2 points assigned.
This criteria used industry in which company operates:
Sector: Communication services
Industry: Entertainment
Based on industry, 3 points assigned.
This criteria used Company's Price To Earning (P/E) Ratio to determines its fair value:
Forward PE Ratio: 32.04
Since Forward PE Ratio is between 25 - 35, 1 point assigned.
This criteria used Company's ability to convert Sales into free cash flow to determine fair value:
Using last 10 overlapping fiscal years (max 20).Average Free Cash Flow: $251 M
Average Revenue: $1,177 M
Revenue Converted To Free Cash Flow (%): 21.3%
Since Free Cash Flow (FCF) to Revenue percentage is greater than 15, 3 points assigned.
This criteria used company's growth potential to calculate its fair value:
Latest Revenue (2024-12-31): $2,804 M
Revenue 5 Years Ago (2019-12-31): $960 M
Total Growth over 5 Years: 192.0%
5-Year Revenue CAGR (Historical): 23.9%
Forward 5-Year CAGR (Tapered): 16.7%
Since historical Revenue CAGR is greater than 20, 5 points assigned.
This criteria used Company's ability to buy back its own share:
Latest Share Count (2024-12-31): $172 M
Share Count 5 Years Ago (2020-12-31): $83 M
Company is not buying back its own shares, 0 points assigned.
This criteria used Company's dividend payout ratio to determine its fair value:
Next Year Earnings Per Share (EPS): $9.05
Trailing 12-Month Earnings Per Share (EPS): $3.52
Average Earnings Per Share (EPS): $6.29
Dividend Per Share (DPS): $1
Payout Ratio: 12%
Dividend Yield: 0%
Since company Payout Ratio is less than 50, 2 points assigned.
Since Dividend Yield is less than 1, 0 point assigned.
This criteria used Company's Return On Equity (ROE%) to determine its fair value:
Using last 10 valid ROE years (max 20).Average ROE: 24.7%
Since Average ROE is greater than 20, 5 points assigned.
This criteria used Company's current price to its 52 week low price to determines its fair value:
Current Price: $201
52-Week Low: $113
Threshold Price (15% Above 52-Week Low): $130
Since Current price is not within 15% threshold, 0 point assigned.
This criteria used Company's Market Cap to determines its fair value:
Market Capitalization: $16,628 M
Since Market Cap is between 10B - 100B, 2 points assigned.
% Exposure to Total Portfolio
Based on the market cap, we recommend do not exceed 3% exposure of Total Portfolio.
Warren Buffett's Owners' Earnings:
Owners' Earnings (FCF/Share) (TTM ending 2025-06-30): $4.27
Owners' Earnings (FCF/Share, latest positive annual) (2024-12-31): $2.96
Note: Many fast-growing companies reinvest heavily, so Owners' Earnings may appear low.
Consider other factors in your valuation.
Value-Trade has assigned 23 points to above TKO Group Holdings, Inc. (TKO) stock.
Heads up: One or more P/E inputs look exaggerated and may skew the blend.
• Last 1 Years Avg PE
40.00 (>2× median)
Further research is recommended; please use your own due diligence.In such cases, multiplying earnings by the long-run average P/E typically gives a closer, more reliable fair value.
Rule of thumb: Last 1 Years Avg P/E (40.00)
× EPS ($6.29) = $251.40.
Last 1 Years Avg PE
40, Fair Value PE
15, Industry Based PE
18, Growth Based PE
16.73, RCFC Based PE
21.34, ROE Based PE
24.71, Risk-Free Anchored PE (25% MoS)
17.61. Based on these 7 values (after removing statistical outliers, n=6), average assigned is
18.90. Value-Trades has assined P/E value
18.90. An average (Current Year EPS + Next Year EPS) earning per share is
$6.285.
Note: Final fair value is the lesser of the blended PE-based fair value and the simple average PE × EPS fair value.Fair value using multiple P/Es (blended): $118.77 (PE 18.90 × EPS $6.29)
Fair value using simple average PE × EPS: $251.40 (PE 40.00 × EPS $6.29)
Lesser of these two: $118.77
So the Final Fair Value is: $118.77
Understanding the Value-Trades P/E Blend (click to expand)
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What goes into the blended P/E?
- 20-Year Avg P/E — Long-run market baseline; conservative anchor.
- Fair Value P/E — Score-based (cash, debt, sector, etc.).
- Industry P/E — Peer group norm.
- Growth-Based P/E — Uses tapered growth rates, floored at 15.
- RCFC-Based P/E — Maps cash conversion efficiency.
- ROE-Based P/E — Higher ROE supports higher multiples.
- Risk-Free Anchored P/E — Macro floor tied to 10y yield w/ MoS.
How it works
- Extreme values are clamped/filtered (IQR method).
- Anchors (20y avg, RCFC/ROE, risk-free) are always kept if valid.
- Final fair value = min(Blended PE × EPS, Avg PE × EPS).
P/E Reference Summary
Using EPS: $6.29
Using Owners' Earnings (Latest FCF/Share): $4.27
Note: Many highly growing companies reinvest heavily back into the business,
so their Owners' Earnings may appear very low. In such cases, other criteria should
be considered to assess the company’s true worth.
| Source |
P/E Ratio |
Implied Fair Value |
| Market (1 Yr Ago) | 7,105.5 | $44,658.07 |
| 1 Yrs Avg-PE | 40 | $251.40 |
| Value-Trades Assigned | 18.9 | $118.79 |
| Owners' Earnings × 1 Yrs Avg-PE | 40 | $170.80 |
Note: Only 1 years of reliable P/E data available. Fair value is calculated using blended models to reduce bias.
