WWE: Weekly Stock Highlights #4, Oct 22nd

Share the joy

WWE stock continued its horrific October this week, falling from a close of $82.03 last Friday to settle at $69.78 today. This represents a one-week decline of -14.93%.

While the broader market was likely the cause of a bad start to the week, WWE’s 3Q financial numbers on Thursday sent the shares as low as 4.37% as WWE missed revenue projections by 13.65M.

Since I have started covering WWE stock on Daily DDT (about 4 weeks), the stock is down -28.33% ($97.36).

WWE is still well above its 52-week low of $24.60 (+183.66%) but that number will be on the rise in the upcoming weeks as WWE began its meteoric rise about this time last year.


Day Open Close Change
Monday $82.17 $83.25 +1.49%
Tuesday $81.25 $82.24 -1.21%
Wednesday $82.05 $77.37 -5.92%
Thursday (*AM EARNINGS*) $77.58 $75.65 -2.22%
Friday $74.51 $69.78 -7.80%


Highlights From The Week

WWE gave its 3Q financial results before the markets opened on Thursday. While WWE beat EPS estimates, revenue missed by 13.65M. WWE is still having a record year for revenue, $657.7M through 9 months ended September 30th. However, a deeper look into the revenue by segment illuminates some problems for WWE that need to be addressed. While the media segment was up 8.6% ($142.1M), live events and consumer products were down 15.5% and 18.3% respectively on revenues of $26.7M and 19.6M.

While the live event figures have been steadily trending downward for years, WWE usually posts much stronger sales in the consumer products segment of the business.

Kevin’s Take After Earnings

While I have yet to re-run my price target analysis based on the new numbers, my 2019 price target remains $82 for the time being. This price target assumes (a) the Saudi relationship stays intact and (b) WWE rolls out a tiered WWE Network system by 2020.

For those interested in a deeper dive, I provided an in-depth report on WWE’s Q3 numbers at Seeking Alpha yesterday. Given the uncertain market conditions and the lack of a near-term catalyst, I continue to recommend a HOLD.

For full disclosure, if the stock trades into the low 50’s (which is still a ways off) I may sell a put option to potentially get into the position. For those new to stock/options trading, I will go into more detail on what that means in a future weekly highlight in the event I do it.

WWE is currently trading at 53x 2019 earnings estimates ($1.31 EPS) and 22x 2020 earnings estimates ($3.29 EPS) based on Friday’s closing price of $69.78.

Catch Yourself Up: Last 3 Weekly Highlights

Weekly Highlights #3, Week of 10/15 through 10/19

Weekly Highlights #2, Week of 10/08 through 10/12

Weekly Highlights #1, Week of 10/01 through 10/05

Selected Analyst Reports

Kevin Cavanagh, Daily DDT: $82 Price Target (2019), $93-$95 Price Target (2020)

KeyBanc: $104 Price Target (*High Price*)

Morgan Stanley: $100 Price Target

BTIG: $92 Price Target

Next: A Brief History of The Women’s Revolution, Part 3

Disclosure: I have no positions in WWE stock and no plans to initiate any positions within the next 72 hours. Investors should do their own due diligence before making any investment decisions.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *