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World Wrestling (WWE) Packs a Punch, Hits a 52-Week High

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World Wrestling Entertainment, Inc. (WWE - Free Report) banks on increasing original content, subscriber growth and higher TV rights fees. These factors have helped the stock rally around 42%, outperforming its industry’s and the S&P 500 index’s respective growth of 10.5% and 4.7% in the past three months.

Moreover, shares of this Stamford, CT-based company have touched a 52-week high of $88.95, before closing the session a tad lower at $88.75 on Sep 4.



Not to forget, the company’s stellar second-quarter 2018 performance and upbeat view perked up investors. Although earnings fell shy of the consensus mark, net revenues steered past the same. Notably, both the metrics showed significant improvement on a year-over-year basis. Management now envisions full-year adjusted OIBDA in the band of $160-$170 million.

Moreover, an impressive estimate revision trend for the current and next fiscal buoys optimism. Over the past 30 days, the Zacks Consensus Estimate for 2018 and 2019 has moved up by 4 cents to 87 cents and $1.31, respectively.

WWE has been implementing strategies, ranging from the development of fresh content, execution of customer acquisition and retention programs, increase in distribution platform, introduction of features to foraying into new regions in order to boost revenues. Additionally, the company is expanding the monetization of WWE content worldwide.

Expanding its television reach, WWE witnessed third fascinating season of Total Bellas, developed a new series, Miz & Mrs. (premiered on Jul 24, 2018) and announced the eighth season Fall return of Total Divas. The company also believes that it will continue to add more WWE Network subscribers.

The number of average paid subscribers increased 10% year over year in the second quarter to 1.80 million. Management now envisions average paid subscribers at 1.67 million for the third quarter, reflecting an increase of 10% from the prior-year period.

During the first six months of 2018, digital video views surged 58% to 14.4 billion, while hours consumed soared 71% to 509 million across digital and social media platforms. Core content rights fees jumped 10.1% in the quarter under review.

However, we believe that any drop in ticket sales, fall in the count of live events, rising costs at WWE Network and stiff competition from other entertainment platforms may hurt profitability.

Nevertheless, we expect the company’s upsides to offset minor hurdles and continue to fuel momentum. Currently, WWE carries a Zacks Rank #3 (Hold) and has a Growth Score of A.

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