On Monday, an analyst from MoffettNathanson adjusted the price target for TKO Group Holdings (NYSE: TKO), increasing it to $98 from the previous $90. The firm's outlook on the stock remains Neutral despite the revision in the price target.
The decision to raise the price target comes with a valuation methodology based on enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). The analyst applied a multiple of 12.0x to the estimated adjusted EBITDA for the year 2026, which is an increase from the previously used 11.0x multiple.
The change in the price target reflects an increment of $8. This adjustment indicates a refined expectation for the company's future financial performance, specifically regarding its earnings potential in the coming years.
The analyst's comments highlight the basis for the updated valuation, focusing on the company's estimated adjusted EBITDA. The use of the EV/EBITDA valuation methodology is a common practice for assessing a company's financial health and potential for growth.
InvestingPro Insights
The recent price target update by MoffettNathanson for TKO Group Holdings (NYSE: TKO) reflects an optimistic view on the company's future earnings potential. In alignment with this, InvestingPro Tips indicate that net income for TKO is expected to grow this year, and analysts anticipate sales growth in the current year. This aligns with the analyst's rationale for the increased price target based on the EV/EBITDA valuation methodology.
Current InvestingPro Data shows that TKO has a market capitalization of $7.81 billion and has experienced impressive revenue growth of 46.91% over the last twelve months as of Q4 2023. The company has also demonstrated a substantial quarterly revenue growth of 125.92% in Q4 2023. Despite not paying dividends, the company has shown a strong return over the last three months, with a price total return of 16.96%.
Investors looking to delve deeper into TKO's financials and future can find more InvestingPro Tips by visiting https://www.investing.com/pro/TKO. Additionally, using the coupon code PRONEWS24 will grant an extra 10% off a yearly or biyearly Pro and Pro+ subscription, providing access to a total of 12 additional tips that could further inform investment decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.