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TKO Group Holdings, Inc. (TKO) vs Warner Music Group Corp. (WMG)

TKO Group Holdings, Inc. and Warner Music Group Corp. are both Entertainment companies. TKO Group Holdings, Inc. is the larger, with a market value of $35.8B against $16.7B — 2.1× the size. Warner Music Group Corp. trades at the lower P/E: 24.4× against 30.1×. TKO Group Holdings, Inc. grew revenue faster over the last twelve months: 19.8% against 12.9%. Warner Music Group Corp. has the higher net margin (9.20% vs 5.18%) and the higher return on invested capital (12.4% vs 6.53%). Both pay a dividend; Warner Music Group Corp. yields more (2.46% vs 1.66%). Across the 23 metrics below, TKO Group Holdings, Inc. leads on 14 and Warner Music Group Corp. on 9.

Valuation

Metric TKO WMG Entertainment median
P/E 30.14 24.44 22.74
P/S 2.50 2.23 1.42
P/B 1.68 17.12 1.75
Price to free cash flow 8.04 19.52 16.20
EV/EBITDA 9.92 14.48 8.73
EV/Sales 3.09 2.81 1.64
Earnings yield 3.32% 4.09% (1.47%)
Free cash flow yield 12.44% 5.12% 4.06%

Profitability

Metric TKO WMG Entertainment median
Gross margin 60.32% 45.77% 45.34%
Operating margin 21.71% 13.69% 2.37%
Net margin 5.18% 9.20% 0.00%
Free cash flow margin 31.10% 11.45% 3.16%
Return on equity 3.25% 76.15% 3.11%
Return on assets 1.81% 6.55% 0.00%
Return on invested capital 6.53% 12.39% 1.26%

Growth

Metric TKO WMG Entertainment median
Revenue growth (TTM) 19.83% 12.91% 8.76%
EPS growth (last fiscal year) 11,200.00% (16.87%) 9.67%
Revenue growth, 5-year CAGR 37.19% 8.49% 10.07%
Net income growth, 5-year CAGR 8.20% 0.00% 0.00%

Health

Metric TKO WMG Entertainment median
Debt to equity 0.59 4.94 0.46
Current ratio 1.35 0.73 1.00
Net debt to EBITDA 2.07 3.58 0.97

Dividend

Metric TKO WMG Entertainment median
Dividend yield 1.66% 2.46% 1.24%
Payout ratio 0.51 0.61 0.26

Size

Metric TKO WMG Entertainment median
Market cap 35.80b 16.70b 3.22b

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