About TKO Group Holdings
TKO Group Holdings, Inc. operates as a sports and entertainment company. It operates through four segments: Media and Content, Live Events, Sponsorships, and Consumer Products Licensing. The company produces live events, television programs, and long-form and short-form video content across various platforms, including broadcast, pay television, and streaming, as well as digital and social media across approximately 170 countries. It is involved in the merchandising of video games, apparel, equipment, trading cards, memorabilia, digital goods, and toys, as well as sale of travel packages and tickets.
The company engages in the corporate sponsorships and advertising business, which offers sale of in-venue and in-broadcast advertising assets, content product integration, and digital impressions. TKO Group Holdings, Inc. is based in New York, New York. TKO Group Holdings, Inc. is a subsidiary of Endeavor Group Holdings, Inc.
TKO operates in the Services | Entertainment | headquartered in New York | led by CEO Ariel Zev Emanuel.
The $40.0B question: What happens when a company this good becomes this expensive?
The American consumer has always been a fickle beast — spending freely in good times and retreating in bad. TKO Group Holdings, Inc. has spent decades learning to read those moods, and right now, the reading is surprisingly sanguine.
At $40.0B in market capitalization, TKO Group Holdings, Inc. (TKO) currently ranks #254 in our quantitative model, with a composite score of 75.6/100. That places it firmly in "Strong Buy" territory — our highest conviction rating.
But here's the thing about stocks priced for perfection: They leave no room for error.
The Numbers That Matter
Let's start with what's undeniably true. Our 6-factor model gives TKO the following scores:
| Factor | Score | Weight | Assessment |
|---|---|---|---|
| Quality | 61/100 | 30% | Strong |
| Value | 67/100 | 15% | Fair |
| Momentum | 87/100 | 25% | Accelerating |
| Investment | 42/100 | 10% | Moderate |
| Stability | 86/100 | 10% | Fortress |
| Short Interest | 44/100 | 10% | Normal |
The quality score of 61/100 is the headline here. It reflects profitability metrics that would make most CFOs weep with envy:
- ROE: 3.3%
- Net Margin: 9.5%
- Gross Margin: 1.0%
These aren't just good numbers. They're the kind of numbers that make TKO a "must-own" stock for institutional portfolios.
The Bull Case
"If you could design a business in a laboratory, it would look something like TKO."
The bull case writes itself:
- Quality is persistent. Academic research shows high-quality stocks outperform by 4-6% annually over long periods. TKO is quality defined.
- Momentum is real. With a momentum score of 87/100, the stock has been recognized by the market — and momentum tends to persist.
- The moat is deep. Companies with these margins don't lose them easily. The competitive position is entrenched.
The Bear Case
But here's what keeps value investors up at night:
- Valuation compression risk. At current levels, the stock is priced for continued perfection. Any stumble — a missed quarter, a competitive threat, a macro slowdown — could compress the multiple from 175.1x to the low 20s. That's a 20-30% decline without anything fundamentally "wrong."
- The crowded trade problem. When everyone owns a stock, who's left to buy? Momentum works until it doesn't.
- Mean reversion. Trees don't grow to the sky. At some point, growth decelerates.
The Valuation Framework
| Scenario | Assumption | Fair Value | Upside/Downside |
|---|---|---|---|
| Bear | Multiple compression to 20x | -20% | Downside |
| Base | Current trajectory continues | +10-15% | Modest upside |
| Bull | Momentum accelerates | +30-40% | Significant upside |
The risk-reward is ... fine. Not exceptional. Not terrible. Just fine.
The Bottom Line
TKO Group Holdings, Inc. is exactly what it appears to be: a high-quality business with strong momentum trading at a premium price. Whether that's attractive depends entirely on what kind of investor you are.
For long-term, buy-and-hold investors, TKO is a core holding. For value investors or short-term traders, look elsewhere.
The company is priced for perfection — and in markets, as in life, perfection is a fragile thing.
⭐⭐⭐⭐⭐ Rating: 5-Star Strong Buy
Score: 75.6/100 | Rank: #254 of 3,571 stocks
Sector: Consumer Discretionary
This analysis reflects the views of Blank Capital Research as of February 16, 2026. It is not investment advice. Past performance does not guarantee future results.