With TKO Group Holdings (NYSE:TKO) stock up over 30% year-to-date, helped by a new media rights deal with Paramount Skydance (NASDAQ:PSKY), an analyst is moving to the sidelines with a rating downgrade.
The TKO Analyst: Seaport Research analyst David Joyce downgraded TKO stock from Buy to Neutral with no price target.
See how TKO stock is doing here.
The Analyst Takeaways: Joyce said he was "stepping out of the ring" with TKO stock in a new investor note.
The downgrade comes after TKO stock surpassed the base case valuation of $188 and neared the $209 upside case valuation previously laid out.
"With the key TKO change agent having been announced — the larger-than-expected domestic UFC rights deal with Paramount Skydance — we think much of the company’s progress has been priced in," Joyce said.
While the analyst downgrades the stock, the new report mentions areas like Zuffa Boxing, sponsorships, WWE deals and OnLocation events that could provide more growth. Joyce said the downgrade could prove to be conservative if the boxing segment shows "better economics sooner rather than later."
"We remain constructive on the growth opportunity set for TKO, but would lighten up exposure with some softening labor data (perhaps more relevant to WWE than UFC, based on ticketing price points)."
Joyce said it may be "prudent" to take profits on stocks in the live event and experiences space like TKO Group stock.
"If the recent softening in labor data is a potential indicator for the forward health of the consumer, pertaining in TKO's case to event attendance, pricing, and ancillary spending, then further monitoring and caution should be heightened."
The analyst said 2026 estimates include the new media rights deal with Paramount Skydance and the comparison of the number of events from year to year.
What's Next: Not included in the investor note from Joyce is the upcoming UFC fight at the White House on July 4.
This fight, which was recently confirmed as happening by UFC CEO Dana White, could be a major catalyst for UFC and for TKO Group stock.
Reports indicate strong interest from top fighters for the UFC event that could include title fights, fighters participating in their last fights before retirement and fighters coming back to UFC out of retirement or after years away from the organization.
While the fight won't have huge attendance due to the logistics of being at the White House as the first major sporting event taking place at this Washington D.C. location, it could make up for that in other areas.
A UFC fight at the White House could command premium viewership on CBS, where White indicated the fight would air, and also see strong advertising demand.
While the UFC fight at the White House has not been officially confirmed by the organization and remains 10 months away, it is a catalyst that is likely underestimated by analysts currently.
TKO Price Action: TKO stock is down 2.41% on Tuesday to $195.64 versus a 52-week trading range of $113.16 to $200.71. TKO stock is up 37.3% year-to-date in 2025.
Photo: A. Ricardo via Shutterstock
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