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EDR

Endeavor Group Holdings NYSE:EDR Stock Report

Last Price

US$21.18

Market Cap

US$10.1b

7D

9.7%

1Y

-17.2%

Updated

05 Oct, 2022

Data

Company Financials +
EDR fundamental analysis
Snowflake Score
Valuation6/6
Future Growth4/6
Past Performance4/6
Financial Health1/6
Dividends0/6

EDR Stock Overview

Endeavor Group Holdings, Inc. operates as an entertainment, sports, and content company in the United States, the United Kingdom, and internationally.

Endeavor Group Holdings, Inc. Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Endeavor Group Holdings
Historical stock prices
Current Share PriceUS$21.18
52 Week HighUS$35.29
52 Week LowUS$17.42
Beta0
1 Month Change-7.07%
3 Month Change-3.16%
1 Year Change-17.23%
3 Year Changen/a
5 Year Changen/a
Change since IPO-15.95%

Recent News & Updates

Oct 05

Endeavor Group: Attractive Because Of The Fast-Growing High-Margin UFC Business

Summary I'm in Endeavor Group Holdings, Inc. for its wholly owned crown jewel: the UFC. Revenue and EBITDA are growing fast and Endeavor Group Holdings is well-positioned in the sports/media content world. I don't love Endeavor Group's debt stack and its characteristics. At this moment in time, I think Endeavor Group Holdings is slightly too vulnerable to Fed policy to add. Endeavor Group Holdings, Inc. (EDR) is a $9.5 billion U.S.-based talent agency that is led by Ari Emanuel. He’s impersonated in the show “Entourage” as Ari Gold by Jeremy Piven. He’s played as a very intense and driven guy, and I suspect it is an exaggerated but big-picture accurate representation. I understand he felt flattered by the representation and started to use Ari Gold lines in real life. I’m not sure the culture at the firm is as great as it could be. The firm also owns the Ultimate Fighting Championship ("UFC"). The UFC is the premier MMA (or mixed martial arts) competition. The UFC is led by Dana White. White is a colorful and outspoken character in his own right. He did seem to have been key to building out the organization from pretty much nothing. Endeavor Group initially pulled its IPO in 2019 after Peleton's IPO (PTON) received a bad reception. This wasn’t long after the WeWork (WE) debacle (a supposed IPO that went horribly wrong). Endeavor management of the highly levered company probably regretted it for all of 2020. They went for it in early 2021, seeing a clear window and with its business picking up dramatically. The valuation isn’t immediately attractive, with revenue of a bit over $4 billion, $368 million of net income, and trailing twelve month EBITDA of $1.31 billion. Emanuel is very acquisitive and likes to buy businesses that are adjacent or have synergy with what the firm is already doing. He does appear to be quite savvy about it. The company acquired Miss Universe from Donald Trump - a long-time client - in 2015. The shareholder list is fairly impressive, and I believe Silver Lake (who owns 35%) has been a long-time backer and likely extensively discussed and/or greenlighted several strategic investments. Margins I don't want to build this write-up around a detailed margins thesis. However, it is useful to highlight how revenue is distributed across owned sports properties (primarily UFC-related), Events, and Representation. The table below shows the most recently released breakdown: EDR segments (EDR) and here's the table I referenced in my original write-up that goes back a bit further: EDR segments (EDR) All segments are growing and generate positive EBITDA. The reason I consider the UFC the crown jewel here is that the growth as well as the margins are very attractive. Rights are currently growing very fast but the margins aren't as great. Growth in rights is likely driven by the changing media landscape. There are giant emerging players like Apple (AAPL), Amazon.com (AMZN) and Alphabet (GOOG, GOOGL) that are taking on more traditional distributors of content. Emanuel commented as follows on the most recent earnings call: First, as it relates to the growing value and demand for sports rights, there have never been more buyers or greater competition, whether that’s Disney paying a high premium to retain F1 or Apple entering into a 10 year deal worth $2.5 billion for MLS. The U.S. market for rights is at an all-time high. This benefits both our own sports portfolio and the hundreds of sports properties we represent. We're also seeing strong rights demand internationally for both our represented and owned properties. On the client side, we continue to broker lucrative deals, like the one for [inaudible] in Latin America and signed new clients having recently struck a 12 year deal with the Rugby Football League to completely reimagine the sport. Margins in the owned sports properties (UFC being the most important) could improve further. Brazil is home to one of UFCs largest fan bases outside the U.S. EDR is now launching its own OTT offer (FIGHT PASS Brazil) in this market, where 96% of fans watch through streaming services. Per Emanuel: For the first time we're owning the customer relationship in one of UFC's fastest growing international market. Enabling us to continuously evolve our offering to address what fans want most, and to attract new fans. This creates yet another blueprint to consider as we look at all the options available across markets when the rights come up for renewal. It will be very interesting to watch FIGHT PASS Brazil, as this is a testing ground for other countries. If this is a highly profitable way to exploit UFC rights, expect similar launches in other countries. What worries me with Endeavor is a large amount of debt on the balance sheet: EDR debt stack (EDR) Unfortunately, quite a large part of this is due in 2025 and another large block in 2026. True, that's still quite a few years away. However, as I wrote in my last update on Endeavor,

Shareholder Returns

EDRUS EntertainmentUS Market
7D9.7%1.2%1.9%
1Y-17.2%-49.9%-18.8%

Return vs Industry: EDR exceeded the US Entertainment industry which returned -49.2% over the past year.

Return vs Market: EDR matched the US Market which returned -18.2% over the past year.

Price Volatility

Is EDR's price volatile compared to industry and market?
EDR volatility
EDR Average Weekly Movement6.1%
Entertainment Industry Average Movement9.2%
Market Average Movement7.0%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.9%

Stable Share Price: EDR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: EDR's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
18987,700Ari Emanuelhttps://www.endeavorco.com

Endeavor Group Holdings, Inc. operates as an entertainment, sports, and content company in the United States, the United Kingdom, and internationally. It operates in three segments: Owned Sports Properties, Events, Experiences & Rights, and Representation. The Owned Sports Properties segment operates a portfolio of sports properties, including Ultimate Fighting Championship, Professional Bull Rider, Euroleague, and Diamond Baseball Holdings, that license broadcast and other intellectual property rights and operate exclusive live events.

Endeavor Group Holdings, Inc. Fundamentals Summary

How do Endeavor Group Holdings's earnings and revenue compare to its market cap?
EDR fundamental statistics
Market CapUS$10.07b
Earnings (TTM)US$369.62m
Revenue (TTM)US$5.68b

16.5x

P/E Ratio

1.1x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
EDR income statement (TTM)
RevenueUS$5.68b
Cost of RevenueUS$2.68b
Gross ProfitUS$3.00b
Other ExpensesUS$2.63b
EarningsUS$369.62m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.28
Gross Margin52.79%
Net Profit Margin6.50%
Debt/Equity Ratio181.9%

How did EDR perform over the long term?

See historical performance and comparison