As of May 22, 2025, World Wrestling Entertainment Inc's estimated intrinsic value ranges from $63.06 to $137.79 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $92.21 | -8.4% |
| Discounted Cash Flow (5Y) | $83.11 | -17.4% |
| Dividend Discount Model (Multi-Stage) | $63.06 | -37.4% |
| Dividend Discount Model (Stable) | $137.79 | +36.9% |
| Earnings Power Value | $98.48 | -2.2% |
Is World Wrestling Entertainment Inc (WWE) undervalued or overvalued?
With the current market price at $100.65, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate World Wrestling Entertainment Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.36 | 0.56 |
| Cost of equity | 5.5% | 8.0% |
| Cost of debt | 4.0% | 4.6% |
| Tax rate | 21.1% | 22.9% |
| Debt/Equity ratio | 0.05 | 0.05 |
| After-tax WACC | 5.4% | 7.8% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $83 | $9,578M | 89.5% |
| 10-Year Growth | $92 | $10,618M | 79.5% |
| 5-Year EBITDA | $47 | $5,414M | 81.4% |
| 10-Year EBITDA | $57 | $6,616M | 67.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $724M |
| Discount Rate (WACC) | 7.8% - 5.4% |
| Enterprise Value | $9,264M - $13,404M |
| Net Debt | $82M |
| Equity Value | $9,182M - $13,322M |
| Outstanding Shares | 114M |
| Fair Value | $80 - $117 |
| Selected Fair Value | $98.48 |
| Metric | Value |
|---|---|
| Market Capitalization | $11500M |
| Enterprise Value | $11582M |
| Trailing P/E | 68.00 |
| Forward P/E | 52.64 |
| Trailing EV/EBITDA | 11.90 |
| Current Dividend Yield | 31.79% |
| Dividend Growth Rate (5Y) | -1.03% |
| Debt-to-Equity Ratio | 0.05 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $27.66 |
| Discounted Cash Flow (5Y) | 25% | $20.78 |
| Dividend Discount Model (Multi-Stage) | 20% | $12.61 |
| Dividend Discount Model (Stable) | 15% | $20.67 |
| Earnings Power Value | 10% | $9.85 |
| Weighted Average | 100% | $91.57 |
Based on our comprehensive valuation analysis, World Wrestling Entertainment Inc's weighted average intrinsic value is $91.57, which is approximately 9.0% below the current market price of $100.65.
Key investment considerations:
Given these factors, we believe World Wrestling Entertainment Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.