Using an unlevered Free Cash Flow to Firm (FCFF) model, we project TKO Group Holdings, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 22.4% to 11.9% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 28, DPO 17, DIO 60). At a 7.9% WACC with mid-year discounting, the terminal value (75% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 10.5x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $103.84 per share, suggesting TKO is overvalued by 46.2% at the current price of $193.01.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 1,244 | 1,252 | 1,584 | 1,425 | 1,595 | 1,635 |
| (−) Net Interest | 495 | 499 | 631 | 568 | 635 | 651 |
| (+) D&A | 60 | 83 | 110 | 139 | 158 | 162 |
| EBITDA | 1,800 | 1,833 | 2,325 | 2,132 | 2,388 | 2,448 |
| (−) Tax | 332 | 334 | 423 | 381 | 426 | — |
| (−) CapEx | 150 | 151 | 191 | 172 | 192 | — |
| (−) ΔWC | 395 | 5 | 203 | -97 | 103 | — |
| Free Cash Flow (FCF) | 922 | 1,343 | 1,509 | 1,676 | 1,667 | — |
| Peers' EBITDA Multiple | 10.5x | |||||
| Terminal Value | 25,681 | |||||
| WACC / Discount Rate | 7.88% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 888 | 1,199 | 1,248 | 1,286 | 1,185 | 17,579 |
| Enterprise Value | 23,384 | |||||
| Projection Period | 5,805 | 24.8% | ||||
| Terminal Value | 17,579 | 75.2% | ||||
| (−) Current Net Debt | 3,232 | |||||
| Equity Value | 20,152 | |||||
| (÷) Outstanding Shares | 194M | |||||
| Fair Price | $104 | -46.2% | ||||
| WACC \ EV/EBITDA Exit Multiple | 6.5x | 8.5x | 10.5x | 12.5x | 14.5x |
|---|---|---|---|---|---|
| 5.9% | $76 | $95 | $114 | $133 | $152 |
| 6.9% | $73 | $91 | $109 | $127 | $145 |
| 7.9% | $69 | $87 | $104 | $121 | $138 |
| 8.9% | $66 | $83 | $99 | $116 | $132 |
| 9.9% | $63 | $79 | $94 | $110 | $126 |
Current price: $193.01. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.