Buy this media stock that's 'positioned for sustained success,' says Jefferies
Jefferies has nothing but glowing remarks for TKO Holdings following rosy first-quarter results at the owner of Ultimate Fighting Championship and World Wrestling Entertainment . "TKO delivered another strong Q, outperforming expectations on top- and bottom-line. Its robust business model and diversified revenue streams are bolstered by strategic acquisitions and $40M in cost synergies," analyst Randall Konik wrote on Friday. TKO also raised its full-year revenue and adjusted EBITDA outlook, he said. "Given mgmt raising F'25 guidance and a > 60% [free cash flow] conversion, TKO is positioned for sustained success," Konik added. Konik reiterated a buy rating on the stock, alongside an unchanged $220 per share price target. Jefferies had already raised the price target, which now implies about 30% upside from Thursday's $168.96 close, from $200 in March. TKO YTD mountain TKO Holdings stock in 2025. The analyst highlighted TKO's expansive portfolio of media properties, adding that he expects WWE future expansion with Netflix and forthcoming boxing promotions to serve as growth catalysts. Recent record breaking events for both the WWE and UFC are indicative of more successful live events in the pipeline, he said. TKO also boasts a diversified business model, Konik added, which could be a key driver to raise revenue. "TKO's diversified revenue streams and strategic integrations showcase its robust" business model, the analyst said. "The company's success was evident in UFC 1Q results, with a 15% revenue increase to $360M and a 66% surge in live events and hospitality revenue, driven by high site fees and ticket sales from events like the Fight Night in Saudi Arabia." Konik also said the upcoming renegotiation of the UFC's media rights is a "major opportunity" for the company, which could see TKO "potentially enhance monetization while balancing reach and brand growth in a strong market for sports rights." The UFC currently has a partnership with ESPN that's set to run out at the end of 2025. Shares have advanced almost 13% so far in 2025.
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