TKO Group Holdings (TKO) opened 2026 with Q1 revenue of about US$1.6b and basic EPS of US$1.16, alongside trailing 12 month EPS of US$2.84 on revenue of roughly US$5.1b and net income of US$226.35m, setting a clear marker for how the business is currently earning. Over recent quarters, revenue has moved from US$927.92m in Q4 2024 to US$1.27b in Q1 2025 and then to US$1.60b in Q1 2026. Quarterly basic EPS has ranged from US$0.38 in Q4 2024 to US$0.72 in Q1 2025 and US$1.16 in Q1 2026, giving you a concrete sense of how the top and bottom lines have tracked together. With net profit margin running in the mid single digits and described in the data as improving year on year, this set of results puts the quality and durability of those margins firmly in focus for investors.

See our full analysis for TKO Group Holdings.

With the headline numbers on the table, the next step is to see how they line up with the widely held narratives around TKO’s growth potential, risk profile, and long term earnings power.

Margins and TTM profits step up

• Over the last 12 months, TKO generated US$5.1b of revenue and US$226.3m of net income, giving a 4.5% net margin compared with 3.5% the year before.
• What stands out for the bullish camp is that this higher margin is being framed as “high quality earnings,” which supports the idea of more durable profit streams. However, it also raises the bar because any slip in profitability from the current 4.5% level would directly test the view that TKO’s media rights and live events mix can keep supporting that earnings profile.

Premium P/E and DCF fair value gap

• TKO trades on a trailing P/E of 62.1x, well above the US Entertainment industry at 27.8x and peers at 53.4x, and the DCF fair value in the data is US$159.96 per share versus a current share price of US$187.51.
• Bears argue this premium is hard to justify, pointing to the gap between the current price and the US$159.96 DCF fair value and the weaker dividend coverage. However, those same critics have to weigh that concern against a 31.9% year over year earnings rise and analysts’ expectations for about 29.5% yearly earnings growth, which together suggest the business is currently producing the kind of profit expansion that can keep valuation debates finely balanced.

Skeptics are watching closely to see whether rich valuation multiples and the DCF fair value gap widen or narrow as new results come in, and how that lines up with the structured Bull and Bear arguments around UFC and WWE media rights, live events economics, and leverage on the balance sheet. 🐻 TKO Group Holdings Bear Case

Strong earnings growth versus slower revenue

• Over the past year, earnings grew 31.9% while revenue is described as growing at about 8.6% per year, so profit growth has outpaced sales even though top line expansion is flagged as slower than the broader US market’s 11.4% revenue growth expectation.
• Supporters of the bullish view point to this spread between earnings and revenue growth, together with the 34.9% yearly earnings growth rate over the last five years and analysts’ forecast for roughly 29.5% yearly earnings growth, as evidence that media rights step ups and higher margin sponsorship and site fee income are doing the heavy lifting. However, the same numbers also mean any change in those high margin streams could have an outsized effect if revenue continues to grow more slowly than profits.

Bulls and long term holders will be watching how future quarters balance that gap between earnings and revenue growth, and whether the UFC and WWE rights deals, global live events, and sponsorship mix continue to support the higher margin profile that recent numbers suggest. 🐂 TKO Group Holdings Bull Case

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for TKO Group Holdings on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

With such a mix of optimism and concern in the story so far, it makes sense to look at the full picture yourself rather than rely on any single angle. You can start by weighing up the 3 key rewards and 2 important warning signs.

See What Else Is Out There

TKO’s premium P/E, slower revenue growth relative to earnings, modest 4.5% net margin and weaker dividend coverage all leave limited room for error at the current price.

If you are uneasy about paying up for that kind of profile, it makes sense to look at 51 high quality undervalued stocks that may offer stronger value without the same valuation stretch.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.