World Wrestling Entertainment, Inc. WWE reported a 17.5-percent sales beat and 12.5-percent bottom-line miss Thursday in its second-quarter earnings release.
The news prompted a 5-percent rise in WWE’s share price with continued gains made throughout the session.
Why It’s Important
Experts interpreted the data differently.
“If you take out the $49m of Other Media money (probably from Saudi Arabia), the numbers are very different. Attendance is falling. Social Media growth is slowing. New TV value already baked into share price. Corp costs up,” Chris Harrington, co-host of the podcast Wrestlenomics, said in a tweet.
KeyBanc Capital Markets had a more positive read. In fact, KeyBanc increased its price target on the stock from $85 to $104 and raised its 2018 top-line estimate.
“The results and outlook were heavy on growth from all fronts - OTT, core content rights fees, sponsorship, and consumer products - particularly internationally,” analysts Andy Hargreaves, Tyler Parker and Evan Wingren wrote in a note. “With all core components of its integrated, high incremental margin growth strategy seemingly inflecting over the next 2 years, we believe it can fuel the flywheel and all WWE to step on the gas.”
The analysts attributed the revenue beat to the performance of the Greatest Royal Rumble and increased monetization of media content. They anticipate accelerating growth, expanding margins and long-term opportunities.
Price Action
WWE's stock traded up 3 percent to $83.71 at time of publication.
Related Links:
Over The Top? Morgan Stanley Bumps WWE's Price Target To $100
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