DCF Studio

    TKO · NYQ · Communication Services

    TKO Group Holdings, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 60.57

    Market price

    USD 185.14

    Implied upside

    -67.3%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages 2.28% of revenue against depreciation of 6.93%. A business cannot depreciate more than it invests indefinitely. Capex has been set to 6.93% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Current EV/EBITDA of 28.4x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 60.57-67.3%
    Exit multiple
    USD 115.05-37.9%
    Market price
    USD 185.14

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 5.8bnUSD 5.9bnUSD 6.0bnUSD 6.0bnUSD 6.1bnUSD 6.2bnUSD 6.4bnUSD 6.5bnUSD 6.6bnUSD 6.8bn+1.7%
    EBITUSD 1.1bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.3bn+1.7%
    NOPATUSD 1.0bnUSD 1.0bnUSD 1.0bnUSD 1.0bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.1bnUSD 1.2bn+1.7%
    Add depreciation & amortisationUSD 491.1mUSD 496.0mUSD 501.8mUSD 508.7mUSD 516.6mUSD 525.6mUSD 535.8mUSD 547.2mUSD 559.8mUSD 573.8m+1.7%
    Less capital expenditureUSD -403.8mUSD -446.6mUSD -491.0mUSD -537.4mUSD -586.1mUSD -637.4mUSD -691.6mUSD -749.0mUSD -810.0mUSD -875.0m+9.0%
    Capex, % of revenue6.9%7.6%8.2%8.9%9.6%10.2%10.9%11.5%12.2%12.9%-
    Less increase in working capitalUSD -41.1mUSD -2.2mUSD -2.6mUSD -3.1mUSD -3.5mUSD -4.0mUSD -4.5mUSD -5.1mUSD -5.7mUSD -6.3m-18.9%
    Free cashflow to firmUSD 1.0bnUSD 1.1bnUSD 1.0bnUSD 1.0bnUSD 981.0mUSD 956.6mUSD 932.9mUSD 909.5mUSD 886.4mUSD 863.3m-2.1%
    Discount factor0.96310.89330.82850.76850.71280.66110.61320.56870.52750.4893-
    Present valueUSD 1.0bnUSD 946.1mUSD 855.1mUSD 773.1mUSD 699.2mUSD 632.4mUSD 572.0mUSD 517.3mUSD 467.6mUSD 422.4m-
    Present Value Of The ForecastUSD 6.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.766Reported 0.650, pulled toward 1.0 (Blume)
    Cost of equity8.13%Risk-free + beta x equity risk premium
    Cost of debt5.78%Risk-free + 89bp, the spread for a A- rating at 4.1x interest cover. Book interest / average debt was lower, at 5.7%.
    Market capitalisationUSD 35.0bn89.6% of capital
    Total debtUSD 4.1bn10.4% of capital, book value as a proxy
    Tax rate12.2%Effective, capped at statutory
    WACC7.82%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 60.57

    54% of EV

    Forecast FCFF, final year
    USD 863.3m
    Capex at depreciation, working capital in reinvestment
    USD 1.3bn
    Less reinvestment at g/ROIC (32.0% of NOPAT)
    USD -403.2m
    Capitalised
    USD 857.1m
    ROIC (WACC floor)
    7.8%
    Terminal value, undiscounted
    USD 16.5bn
    Terminal value, discounted
    USD 8.1bn
    Enterprise value
    USD 15.0bn
    Less net debt
    USD 3.2bn
    Equity value
    USD 11.8bn

    Exit at 20.0x EBITDA

    Value per shareUSD 115.05

    73% of EV

    Terminal value, undiscounted
    USD 38.1bn
    Terminal value, discounted
    USD 18.7bn
    Enterprise value
    USD 25.6bn
    Less net debt
    USD 3.2bn
    Equity value
    USD 22.3bn

    Spread between methods: 62%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.82%95.6297.1499.46103.01108.59
    6.82%75.5875.1074.7674.6274.76
    7.81%62.5261.5560.5759.5958.61
    8.82%53.6752.8552.0251.2050.38
    9.81%46.6245.9245.2244.5243.82

    Outlined: this model. Green text: above today's price of 185.14. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year60.7%3.7%15.9%
    EBIT margin47.7%19.6%53.6%
    Discount rate-7.8%4.3%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.