A Look at TKO Group Holdings's Valuation Following Expanded UFC Streaming Deal with Paramount+

TKO Group Holdings (TKO) just announced an expanded multi-year media rights agreement, making UFC content available to Paramount+ subscribers across Latin America and Australia starting in 2026. This move further strengthens TKO’s global media presence and could drive future growth, especially with earnings coming up soon.

See our latest analysis for TKO Group Holdings.

Momentum has been strong for TKO Group Holdings lately, with the share price up over 13% in the past three months and a hefty 59.6% total shareholder return over the last year. The expanded UFC streaming deal and recent blockbuster acquisitions have fueled optimism. The pending earnings report adds a sense of anticipation for what comes next.

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With shares up sharply this year and new deals boosting future prospects, the question is whether TKO remains undervalued after its recent run or if the market has already anticipated the next phase of growth.

Price-to-Earnings of 73.4x: Is It Justified?

At a last close price of $188.40, TKO Group Holdings trades at a lofty price-to-earnings (P/E) ratio of 73.4x. This signals the market is pricing in steep growth or premium status compared to sector rivals.

The P/E ratio measures how much investors are willing to pay for each dollar of a company’s earnings. For entertainment businesses, a higher P/E might reflect anticipated growth, brand strength, or unique content licensing power.

Despite TKO’s rapid transition to profitability and forecasted strong earnings growth, the current P/E far exceeds both its estimated fair P/E of 36.1x and the US Entertainment industry average of 24.4x. This significant difference suggests investors may be over-enthusiastic about future prospects and could be vulnerable to a valuation adjustment if growth expectations slip.

Compared to other entertainment stocks, TKO’s multiple is dramatically higher, even when considering industry excitement, recent deals, or synergies. The fair ratio of 36.1x highlights how much sentiment has surpassed typical valuation levels and could serve as a reference point if the market outlook shifts.

Explore the SWS fair ratio for TKO Group Holdings

Result: Price-to-Earnings of 73.4x (OVERVALUED)

However, softer subscriber growth for streaming platforms or a slowdown in annual revenue gains could quickly challenge the market’s bullish expectations for TKO.

Find out about the key risks to this TKO Group Holdings narrative.

Another View: The SWS DCF Model

Looking from a different angle, the SWS DCF model estimates TKO's fair value at $157.51, which is well below today’s $188.40 share price. This means TKO could be trading above what its future cash flows justify. Is the market's optimism running ahead of fundamentals, or is there more upside to come?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out TKO Group Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 831 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own TKO Group Holdings Narrative

If you see the outlook differently or want to run your own numbers, you can easily craft a personalized narrative using our tools in just a few minutes. So why not Do it your way?

A great starting point for your TKO Group Holdings research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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