2015-07-20
With the launch of WWE Network in February 2014 and the
subsequent crossing of the 1.3 million subscriber mark in March
2015, World Wrestling Entertainment (NYSE:
WWE) is now at a tipping point. If WWE successfully grows the
subscriber base for WWE Network and leverages on the growth
opportunities embedded within international markets, it should
experience significant top line and bottom line expansion. I arrive
at a target price of $21.70 for WWE by applying a 15 times EV/OBIDA
multiple to my estimated OBIDA of $104 million and adding net cash
of $89 million. My target price implies a 28% upside from WWE's
closing share price of $16.93 as of July 18, 2015.
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