Summary TKO Group Holdings is positioned for significant growth in 2026, with multi-billion-dollar media rights deals for UFC, WWE, and PBR. Despite a 27% YoY revenue decline in Q3 2025, TKO's live events and partnerships, especially UFC's, are driving high-margin, recurring revenues. Innovative fan engagement initiatives, including a Polymarket partnership, target younger demographics and enhance live event experiences for UFC and Zuffa Boxing. TKO is rated a hold; shares are undervalued by 41.62% YoY, offering the highest upside among peers, but risks remain if sales guidance is not met. Barely 3 months after signing its landmark $7.7 billion, 7-year deal with Paramount, TKO Group Holdings ( TKO ) announced a 5-year media rights deal between Paramount and Professional Bull Riders ((PBR))- a subsidiary of TKO acquired in Q1 2025. Evidently, 2026 will be a momentous year for TKO, as it will kick-start the multi-billion-dollar agreements it has made for key assets, such as UFC, WWE, and PBR (as previously stated). Shares of TKO jumped 56% (YoY) and 27.84% (YTD). The company also recently released its Q3 2025 earnings results, and despite the 27% (YoY) revenue decrease in the quarter, I will discuss why the stock is a hold in view of its robust growth into 2026. There had been fears that the focus on profits would underscore TKO’s global fan base, especially in properties such as WWE, getting into 2025, especially after it launched on ESPN in September 2025. In its Q3 2025 earnings call, TKO (through its CFO) stated, Live events and hospitality revenue increased 61% to $83 million. The increase was driven by higher ticket sales revenue, reflecting an increase in average ticket price and total attendance, and an increase in site fee revenue.” To me, this is a case of TKO adjusting its pricing of its tickets in accordance with the market. WWE’s revenues for the 3 months ending on September 30, 2025, outperformed UFC’s revenue by about $77 million and accounted for nearly 36% of WWE’s overall quarterly revenue. In the 9 months to September 30, 2025, WWE’s revenue grew 22.73% (YoY) to $1.35 billion, with the growth including a jump up in live events. While WWE outperformed UFC and IMG across the board (as far as revenues are concerned), UFC still controls key differentiators, such as marketing and partnerships, where it commands a good lead. In Q3 2025, UFC’s revenue from partnerships outperformed WWE’s by almost 78%, and it grew 20% (YoY) in the 9 months to September 30, 2025. Essentially, global partnership is a significant revenue driver for TKO as a whole, delivering high margins for the business in the form of recurring multi-year revenues. We have to keep in mind that UFC is discarding pay-per-view revenues after its $7.7 billion deal, which is supposed to begin in 2026. We also need to consider that UFC 306 broke records in 2024, and total revenues in the 9 months to September 2025 outperformed those of 2025 by 7% (YoY), primarily fueled by, among other things, the sponsorship from Saudi Arabia. There have been momentous investments linked with Saudi Arabia, especially in the global sporting scene, and I believe that this partnership with TKO is a precursor to many more. As a reminder, TKO joined the boxing scene (Zuffa Boxing) in H1 2025 following its partnership with Saudi company, General Entertainment Authority, whose launch is expected in January 2026 and is set to be integrated with a prediction feature. TKO is Entering the Prediction Market Zone TKO recently announced that it had struck a multi-year deal with global prediction market company, Polymarket, for UFC and Zuffa Boxing. Under the agreement, the two entities will “integrate the prediction market technology directly into the live fan experience.” The whole point is to grow fan engagement in both UFC and Zuffa boxing through technology. While making this announcement, TKO explained that this agreement will allow live fan predictions to be featured (on both platforms) while the fights are still in progress. Unlike other bookies that integrate sportsbook/betting odds (or probable outcomes), it will feature probabilities implied by the fan base (embedded as a scoreboard). For Polymarket, this deal is an expansion from its traditional politics and global trends to live sporting, especially after landing a partnership agreement with the National Hockey League (NHL). For the NHL, this deal means higher brand exposure and a robust fan engagement platform since the 2025/26 season started in early October 2025. However, TKO is integrating Polymarket into its live events, making it very unique. Then again, when we consider the demographics of TKO’s fan base, which mainly consists of the youth. According to research , the push by tech giants has forced sports broadcasters to take up mobile-centric approaches that not only appeal to the youth, especially Gen Zs, but are also on demand. There is the aspect of diversity and the dual-screen viewership (watching live events while engaging other fans), features that will be central to Polymarket’s dominance at TKO. As of 2024, the decentralized prediction market (which houses Polymarket) was valued at $1.4 billion and is expected to reach $95.5 billion by 2035, growing at a CAGR of 46.8%. Valuation To evaluate the company, I will use the enterprise value (EV) to sales (EV/S) metric, as it will include cash and the company’s debt in the calculation. TKO’s forward EV/sales ratio stands at 4.95X against the sector median of 1.92X (a difference of 157%). For its FY 2025 revenue, the company gave guidance ranging from $4.69 billion to $4.72 billion (a midpoint of $4.705 billion). To calculate the EV, I will multiply 4.95X by $4.705 billion, giving us $23.3 billion. I will calculate TKO’s market capitalization by subtracting debt ($3.7 billion) from the EV and adding cash ($861.41 million), giving us $20.45 billion. TKO’s total shares outstanding as of October 31, 2025, were 78.922 million. To get the future price, I will divide the market cap by the outstanding share balance, which gives $259.20. As of this writing, TKO’s share price was $183.03, meaning that the stock is undervalued by 41.62% (YoY). I will compare the performance of the stock with some of its peers. Fwd. EV/S Fwd. Sales Fwd. EV Fwd. Market Cap Future Share Price Current Price Valuation TKO Group 4.95X $4.705 billion $23.3 billion $20.5 billion $259.20 $183.03 +41.62% (YoY) undervalued Warner Bros. Discovery, Inc. ( WBD ) 2.35X $37.863 billion $88.98 billion $59.78 billion $24.13 $22.98 +5% (YoY) Trading at fair valuation Live Nation Entertainment, Inc. ( LYV ) 1.42X $24.57 billion $34.9 billion $32.24 billion $138.96 $134.42 +3.4% (YoY) Trading at fair valuation Madison Square Garden Sports Corp. ( MSGS ) 6.32X $1.05 billion $6.64 billion $5.51 billion $229.57 $213.88 +7.33% (YoY) trading at fair valuation Of the stocks mentioned in the tabulated analysis, only TKO has a possible significant upside of +40% (YoY). It is also the only company offering a dividend at a yield of 1.65%. To further substantiate this, TKO has a share repurchase program dubbed the ASR Agreement that has since repurchased about $800 million worth of shares, translating to about 4.22 million shares (as at November 17, 2025). Under the Agreement is a share trading plan, "The 10b5-1 Plan" that seeks to repurchase an additional $174 million worth of shares by February 2026. The two plans will likely see TKO repurchase more than 5 million shares into 2026, driving up the price to its target. Seeking Alpha WBD was the highest mover, rising 141% (YoY) and outperforming the S&P 500 by more than 127%. Risks I have pegged my analysis on the view that TKO will realize its sales guidance range of $4.69 billion to $4.72 billion. As of Q3 2025, TKO reported a 27% (YoY) revenue decline, meaning that continual decline in sales into Q4 2025 will adversely affect the stock price. Will TKO Meet its guidance? I believe that TKO's revenue guidance of $4.69 billion to $4.72 billion is not too far-fetched, seeing that the guidance as of Q1 2025, stood at the range of $2.93bn to $3.075bn. The midpoint of $3 billion means that the company is forecasting an increase of 56.67% (YoY). At the time (Q1 2025), the company was mainly looking at two strongholds, UFC and WWE, but there are now PBR and Zuffa Boxing. If we were to also consider emerging growth factors, then TKO is at a fair position. For instance, TKO's talent and marketing arm, International Management Group's (IMG's), revenue in the 9 months to September 30, 2025, exceeded that of UFC by 1.7% at about $1.2 billion. Further, TKO is set to reap from its integration of Polymarket into its live shows. Fans are set to increase their interaction with the fighters, which is a significant expansion of its experience economy, as indicated earlier. The audience will be using crypto bets to predict the outcome of matches- and this exposure cannot be downplayed. Polymarket will also act as Zuffa Boxing's main brand partner and, at the same time, create a prediction market for the fans to bet. TKO will, therefore, grow their earnings from ticket sales to market predictions in their live events. Bottom Line I have rated TKO Group as a hold despite its revenue decline in Q3 2025 due to its expected growth and expansion of its experience economy. The company is big on global partnerships that are profitable to the company, and the recent deal with Polymarket will improve customer engagement and increase viewership. I have also established that TKO is undervalued by at least 40% (YoY), with most of its projects expected to come online in 2026.
