Categories Analysis, Technology

This media stock grew 270% in the past one year!

Electrifying music plays in the background, paving way to a wide-applause. The commentator’s voice rips through the acclamation, “With a growth of 270% in the past 52 weeks and 159% year to date, let me introduce to you, the media and entertainment champion, World Wrestling Entertainment (WWE).”

Well, WWE deserves nothing less than the glittery introductions its superstars get, for the kind of growth it has shown in 2018.

And why not! It has outstripped media giants including Disney (DIS), Netflix (NFLX), Viacom (VIAB) and 21st Century Fox (FOXA), which have grown 13%, 106%, 0.8% and 60% respectively in the last one year.

WWE
Courtesy: WWE

The WWE stock is currently trading at around $79, but Morgan Staley has set a price target of $100 on the stock. That is plenty of upside, for a stock that has multiplied this year.

Upon giving an overweight rating, analyst Benjamin Swinburne said last month, “By securing a 3.6x multiple in its new five-year agreements with NBC/FOX relative to its prior five-year broadcast agreement with NBC, WWE gains a massive increase in earnings power, with visibility into the revenue associated with these new rights extremely high.”

WWE has been curating special content for its own website as well as YouTube and Facebook, where there are further options for monetization.

In fact this is exactly where WWE has been scoring. While on one side, the company maintains its relationship with television broadcasters, on the other, it is transforming itself as a direct-to-consumer giant.

In the second quarter, the company extended its long-standing agreement on Monday Night Raw’s broadcast rights with NBC Universal. In the same month, it struck another deal with Fox Sports for the telecast of the Smackdown edition. These new deals are reportedly more than three times higher in value than the current broadcast agreements for Raw and Smackdown.

But that is not all; the company has been curating special content for its own website as well as YouTube and Facebook, where there are further options for monetization. The introduction of digital subscription model have also provided fillip to the company’s topline growth.

This also helped the company beat analysts’ estimates for the recently-ended second quarter.  During the quarter, paid subscriber count rose 10% to 1.8 million, while digital video views jumped 58% year-over year. That was quite a finisher!

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