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Endeavor Group (EDR - Free Report) is a Zacks Rank #1 (Strong Buy) that operates as an entertainment, sports, and content company. The company is comprised of industry leaders including entertainment agency WME; sports, fashion, events and media company IMG; and premier mixed martial arts organization UFC.
After trading sideways for most of the year, the stock dipped to October lows on the broad market selloff. However, recent earnings helped the stock rally back above technical resistance. So, is the stock ready to finally break out?
Let’s take a closer look.
More about EDR
Endeavor Group employs almost 7,700 and has a market cap of $22 billion. The company was founded in 2009 and is headquartered in Beverly Hills, California.
The company operates in three segments: Owned Sports Properties, Events, Experiences & Rights, and Representation.The stock has a Forward PE of 22 and Zacks Style Scores of “A” in Growth and Momentum.
Here is how the Endeavor describes its network on its website:
“The Endeavor network specializes in talent representation, sports operations & advisory, event & experiences management, media production & distribution, experiential marketing and brand licensing.”
Big Q4 Earnings Beat
On March 16th, the company reported an impressive earnings beat that helped the stock rally about 10%. The 161% beat on EPS was the third straight and the company hasn’t missed since becoming public.
Not only did the company beat on both the top and bottom lines, but Endeavor also guided FY22 higher. The company now sees revenues at $5.20-5.45B vs the $5.1B expected.
Management commented that Endeavor is seeing significant outperformance across the portfolio as the world emerged from the pandemic. They added that they are seeing “increased attendance at live events and continued heightened demand for premium content”.
One negative note for some investors was the news that Elon Musk would resign from the board. The company noted that the resignation was not a result of disagreement or any matter having to do with company operations or polices.
Mixed Estimates
While the earnings print and guide was strong, estimates are not moving higher over the shorter term. However, looking to next year, estimates are shooting higher.
For next year, estimates have moved higher over the last 30 days. Analysts have hiked 23%, lifting from $1.29 from $1.59.
With long-term estimates going higher, the stock also got a price target lift from Piper Sandler. The firm kept its Overweight target and lifted its target to $37 from $35. The firm cites solid momentum and asset mix improving. Moreover, Piper seemed impressed with the Representation segment and the best full-year performance ever from UFC.
Since going public in May of last year, the stock has traded sideways, sticking close to the $30 level. EDR made a high late last year just over $35 and then came close to printing all time lows earlier this month, coming just shy of that mark at $24.
Earnings helped the stock bounce back over $30, which brought the stock over the 200-, 50-, and 21-day moving averages. This momentum has given the bulls control of the stock and if market conditions improve, we could see those highs from last year taken out and the stock move to $40.
If the stock were to move back under the $28 level, the bears have taken back control. If this were to happen, the short-term earnings situation might have to play out before the stock can break higher.
In Summary
Endeavor is a niche company that doesn’t have a lot of eyeballs on it. The popular UFC brand could help the stock get going if the bulls can fight their way to the all-time highs.
If that scenario plays out, momentum could help the stock move higher while the long-term earnings story plays out.
As mentioned above, short-term estimates are falling, so the next couple earnings reports will likely be a catalyst for the stock to break higher.
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Bull of the Day: Endeavor Group (EDR)
Endeavor Group (EDR - Free Report) is a Zacks Rank #1 (Strong Buy) that operates as an entertainment, sports, and content company. The company is comprised of industry leaders including entertainment agency WME; sports, fashion, events and media company IMG; and premier mixed martial arts organization UFC.
After trading sideways for most of the year, the stock dipped to October lows on the broad market selloff. However, recent earnings helped the stock rally back above technical resistance. So, is the stock ready to finally break out?
Let’s take a closer look.
More about EDR
Endeavor Group employs almost 7,700 and has a market cap of $22 billion. The company was founded in 2009 and is headquartered in Beverly Hills, California.
The company operates in three segments: Owned Sports Properties, Events, Experiences & Rights, and Representation.The stock has a Forward PE of 22 and Zacks Style Scores of “A” in Growth and Momentum.
Here is how the Endeavor describes its network on its website:
“The Endeavor network specializes in talent representation, sports operations & advisory, event & experiences management, media production & distribution, experiential marketing and brand licensing.”
Big Q4 Earnings Beat
On March 16th, the company reported an impressive earnings beat that helped the stock rally about 10%. The 161% beat on EPS was the third straight and the company hasn’t missed since becoming public.
Not only did the company beat on both the top and bottom lines, but Endeavor also guided FY22 higher. The company now sees revenues at $5.20-5.45B vs the $5.1B expected.
Management commented that Endeavor is seeing significant outperformance across the portfolio as the world emerged from the pandemic. They added that they are seeing “increased attendance at live events and continued heightened demand for premium content”.
One negative note for some investors was the news that Elon Musk would resign from the board. The company noted that the resignation was not a result of disagreement or any matter having to do with company operations or polices.
Mixed Estimates
While the earnings print and guide was strong, estimates are not moving higher over the shorter term. However, looking to next year, estimates are shooting higher.
For next year, estimates have moved higher over the last 30 days. Analysts have hiked 23%, lifting from $1.29 from $1.59.
With long-term estimates going higher, the stock also got a price target lift from Piper Sandler. The firm kept its Overweight target and lifted its target to $37 from $35. The firm cites solid momentum and asset mix improving. Moreover, Piper seemed impressed with the Representation segment and the best full-year performance ever from UFC.
Endeavor Group Holdings, Inc. Price and Consensus
Endeavor Group Holdings, Inc. price-consensus-chart | Endeavor Group Holdings, Inc. Quote
The Technical Take
Since going public in May of last year, the stock has traded sideways, sticking close to the $30 level. EDR made a high late last year just over $35 and then came close to printing all time lows earlier this month, coming just shy of that mark at $24.
Earnings helped the stock bounce back over $30, which brought the stock over the 200-, 50-, and 21-day moving averages. This momentum has given the bulls control of the stock and if market conditions improve, we could see those highs from last year taken out and the stock move to $40.
If the stock were to move back under the $28 level, the bears have taken back control. If this were to happen, the short-term earnings situation might have to play out before the stock can break higher.
In Summary
Endeavor is a niche company that doesn’t have a lot of eyeballs on it. The popular UFC brand could help the stock get going if the bulls can fight their way to the all-time highs.
If that scenario plays out, momentum could help the stock move higher while the long-term earnings story plays out.
As mentioned above, short-term estimates are falling, so the next couple earnings reports will likely be a catalyst for the stock to break higher.