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Definitive Analysis

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World Wrestling Entertainment, Inc.

Intrinsic Value Analysis (Discounted Cash Flow)Industry: EntertainmentSector: Communication Services

Fair Value Summary

Current Price$100.65
5Y Range49.27 – 74.33
5Y Selected61.80
(-) Safety Margin39.11%
5Y Buy Price$37.63
Upside (to Buy Price)-62.61%
10Y Range54.31 – 79.51
10Y Selected66.91
(-) Safety Margin39.11%
10Y Buy Price$40.74
Upside (to Buy Price)-59.52%

Company Predictability & Safety

MetricValue
Revenue R2 (5Y)0.8307
Revenue R2 (10Y)0.9702
Net Income R2 (5Y)0.8441
Net Income R2 (10Y)0.9094
EBITDA R2 (5Y)0.9524
EBITDA R2 (10Y)0.9528
FCF R2 (5Y)0.0028
FCF R2 (10Y)0.5130
Safety Score0.6089

DA 10-Year Projection

Metric2023202420252026202720282029203020312032
% Growth6.68%6.39%6.09%5.79%5.49%5.19%4.89%4.60%4.30%4.00%
Revenue1,377.821,465.801,555.031,645.061,735.391,825.501,914.852,002.862,088.952,172.51
EBITDA395.20420.43446.02471.85497.75523.60549.23574.47599.17623.13
D&A-122.84-130.68-138.63-146.66-154.71-162.75-170.71-178.56-186.23-193.68
EBIT272.36289.75307.39325.19343.04360.85378.52395.92412.93429.45
Pro forma Taxes-64.09-68.19-72.34-76.52-80.73-84.92-89.07-93.17-97.17-101.06
NOPAT208.27221.57235.05248.66262.32275.94289.44302.75315.76328.39
Capital Expenditures-82.84-88.13-93.49-98.90-104.33-109.75-115.12-120.42-125.59-130.62
NWC Investment0.160.160.160.160.160.160.160.160.150.15
(+) D&A122.84130.68138.63146.66154.71162.75170.71178.56186.23193.68
Free Cash Flow248.42264.28280.36296.58312.86329.09345.19361.05376.56391.61
Diluted Shares Outstanding86,376,750.0086,376,750.0086,376,750.0086,376,750.0086,376,750.0086,376,750.0086,376,750.0086,376,750.0086,376,750.0086,376,750.00

Discounting Periods

MetricDec-23Dec-24Dec-25Dec-26Dec-27Dec-28Dec-29Dec-30Dec-31Dec-32
Period Start6/30/231/1/241/1/251/1/261/1/271/1/281/1/291/1/301/1/311/1/32
Period End12/31/2312/31/2412/31/2512/31/2612/31/2712/31/2812/31/2912/31/3012/31/3112/31/32
Mid-Point9/30/237/1/247/2/257/2/267/2/277/1/287/2/297/2/307/2/317/1/32
Time (t)0.100.100.100.451.452.463.464.465.466.46
Valuation Date1/17/26

Base Case Projected Flows

WACC: 9.10%Terminal Growth: 2.49%
Metric2023202420252026202720282029203020312032TV (5y)TV (10y)
Discount Factor0.990.990.990.960.880.810.740.680.620.57
PV UFCF246.27261.99277.93285.18275.75265.64255.40244.85234.07223.13
Raw: 4,848.57
4,091.39
Raw: 6,069.05
3,310.67

Base Case Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value5,438.505,880.87
(-) Net Debt345.87345.87
Equity Value5,092.645,535.00
(/) Shares Out86.3886.38
Fair Value$58.96$64.08
(-) Safety Margin39.11%39.11%
Buy Price$35.90$39.02
Current Price$100.65$100.65
Upside (to Buy Price)-64.33%-61.23%

Conservative Projected Flows

WACC: 10.10%Terminal Growth: 1.99%
Metric2023202420252026202720282029203020312032TV (5y)TV (10y)
Discount Factor0.990.990.990.960.870.790.720.650.590.54
PV UFCF246.04261.75277.67284.01272.12259.74247.46235.09222.70210.36
Raw: 3,932.83
3,260.14
Raw: 4,922.81
2,520.16

Conservative Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value4,601.745,037.10
(-) Net Debt345.87345.87
Equity Value4,255.874,691.24
(/) Shares Out86.3886.38
Fair Value$49.27$54.31
(-) Safety Margin39.11%39.11%
Buy Price$30.00$33.07
Current Price$100.65$100.65
Upside (to Buy Price)-70.19%-67.14%

Aggressive Projected Flows

WACC: 8.10%Terminal Growth: 2.99%
Metric2023202420252026202720282029203020312032TV (5y)TV (10y)
Discount Factor0.990.990.990.970.890.830.760.710.650.60
PV UFCF246.49262.23278.18286.37279.45271.72263.66255.12246.14236.80
Raw: 6,301.62
5,413.87
Raw: 7,887.86
4,587.63

Aggressive Valuation

5-Year Horizon10-Year Horizon
UFCFUFCF
Enterprise Value6,766.597,213.81
(-) Net Debt345.87345.87
Equity Value6,420.736,867.94
(/) Shares Out86.3886.38
Fair Value$74.33$79.51
(-) Safety Margin39.11%39.11%
Buy Price$45.26$48.41
Current Price$100.65$100.65
Upside (to Buy Price)-55.03%-51.90%

Reverse DCF: Market Implied Growth

Current Price$100.65
WACC Used9.1%
IMPLIED REVENUE GROWTH151.49%
Metric2027202820292030203120322033203420352036
Implied Revenue3,364.528,461.4221,279.5553,515.79134,586.46338,470.49851,216.932,140,719.135,383,678.6613,539,373.50
Constant Implied Growth151.49%151.49%151.49%151.49%151.49%151.49%151.49%151.49%151.49%151.49%
Implied Free Cash Flow0.340.852.135.3513.4633.8585.12214.07538.371,353.94
Discount Factor0.990.810.740.680.620.570.520.480.440.40
Present Value of Implied FCF0.330.681.573.638.3719.2944.46102.48236.23544.55

Rolling Historical DCF (Backtest)

Valuation based on actual realized growth.
YearValuation DateActual PriceRealized Growth (5Y)Calculated Fair ValueValuation Delta
20172017-12-31$30.588.58%$19.43-36.47%
20162016-12-31$18.405.18%$6.74-63.37%
20152015-12-31$17.843.96%$7.19-59.68%
20142014-12-31$12.344.95%$10.87-11.91%
20132013-12-31$16.589.40%$-9.62-158.00%
20122012-12-31$7.8911.51%$10.4832.78%
20112011-12-31$9.3210.29%$11.7926.49%
20102010-12-31$14.246.80%$8.36-41.26%
20092009-12-31$15.332.70%$27.4579.05%
20082008-12-31$11.081.16%$3.74-66.28%
20072007-12-31$14.76-2.02%$17.1716.34%
20062006-04-30$17.20-1.98%$14.07-18.23%
20052005-12-31$0.001.58%$2.690.00%
20042004-04-30$13.766.00%$10.98-20.22%
20032003-04-30$9.087.97%$4.85-46.60%
20022002-04-30$14.455.48%$11.09-23.26%
20012001-04-30$13.63-0.16%$-14.91-209.38%
20002000-04-30$18.13-3.89%$12.03-33.63%
19991999-04-30$25.25-3.74%$10.24-59.45%
19981998-04-30$25.253.17%$1.68-93.36%

Monte Carlo Simulation (1,000 Iterations)

Mean Fair Value
$65.37
Median
$63.73
10th Percentile
$53.74
90th Percentile
$78.42

Fair Value Distribution

$45.93 - $49.92
25
$49.92 - $53.92
79
$53.92 - $57.91
131
$57.91 - $61.91
190
$61.91 - $65.90
158
$65.90 - $69.90
131
$69.90 - $73.89
117
$73.89 - $77.88
63
$77.88 - $81.88
44
$81.88 - $85.87
23
$85.87 - $89.87
13
$89.87 - $93.86
11
$93.86 - $97.85
6
$97.85 - $101.85
2
$101.85 - $105.84
1
$105.84 - $109.84
4
$109.84 - $113.83
0
$113.83 - $117.83
1
$117.83 - $121.82
0
$121.82 - $125.81
1