World Wrestling Entertainment (NYSE: WWE) is a Stamford-based integrated media and entertainment company that is engaged in the sports entertainment business in North America and around the world. Founder and Executive Chairman Vince McMahon grew the company into the most dominant professional wrestling entertainment product on the planet. The product has drawn controversies over the years, but the WWE has only expanded its reach and value over that period. What does the future hold for the WWE in 2023?
How has this stock performed over the last year?
Shares of WWE stock have climbed 70% year over year as of close on January 16. Meanwhile, the stock has shot up 30% to kick off the new year.
Founder Vince McMahon has made a stunning return to the company after taking time away following sexual misconduct allegations in 2022. Current reports indicate that Vince McMahon is aggressively shopping the company. This also comes after Stephanie McMahon, Vince McMahon’s daughter, stepped down as co-chief executive officer and chairwoman. That marks her second departure from the company over the past eight months.
Vince McMahon returned and blamed his absence on “bad advice.” He has claimed that he is the best suited to obtain maximum value for WWE shareholders. That should pique the interest of shareholders and onlookers alike, as 2023 is certain to be an interesting year for the company.
Should investors be optimistic about the WWE’s future?
The WWE has sought to maximize profitability in recent years. It has shown a willingness to aggressively trim the fat where needed, especially when it comes to talent. These moves already had experts and analysts predicting that McMahon was angling for a sale to start this decade.
This company released its third-quarter fiscal 2022 earnings on November 2, 2022. We can expect to see its final batch of fiscal 2022 results in the first week of February.
In the third quarter (Q3) of 2022, the WWE achieved revenue growth of 19% to $304 million. The report uses OIBDA, which stands for operating income before depreciation and amortization. It aims to show profitability in core business activities. The WWE delivered adjusted OIBDA of $91.2 million in Q3 2022, which was up 17% from the previous year.
Vince McMahon and his team have successfully maximized value and profitability at the WWE in recent years. So, who are the top candidates to scoop up the largest professional wrestling brand on the planet?
Who could buy the company in 2023?
Disney is the first name that typically pops up in a discussion over who could snag the WWE at a decent price this year. The mass media conglomerate has a history of snatching up multi-billion-dollar brands, such as Marvel Studios and the Star Wars franchise, and churning out billions in cash. WWE has veered more family friendly in the 21st century, and it appears to be a great fit for Disney right now.
Other top names include Comcast, one of the top three largest media companies in the world, and Saudi Arabia Public Investment Funds, which was rumoured to have a deal done for the WWE last week. Even Amazon has been rumoured as a potentially interested party.
World Wrestling Entertainment: Should you buy the stock today?
A WWE sale seems almost inevitable at this stage. The stock currently possesses a solid price-to-earnings ratio of 35. It is trading in favourable value territory compared to its industry peers. That means a quick buy right now could net an opportunistic investor some quick cash if an aggressive buyer comes through in the weeks or months ahead. WWE stock is worth owning right now.
