WWE: Low End of Subscriber Base is Growing (WWE) - Investopedia

After the closing bell on Monday, World Wrestling Entertainment Inc. (WWE) raised its fourth quarter projected range of average paid WWE Network subscribers. In a news release, the company said they now expect at least 1.4 million subscribers. Previously the company had expected subscribers of 1.4 million but that fell within a plus or minus 2% variance -- implying a potentially lower subscriber base. The company also reaffirmed fourth quarter projections for Adjusted OIBDA of approximately $20 million to $24 million.

The change in guidance may not be enough to impress investors. Shares are not reacting in after hours trading, however, they are up 10% over the past month and currently trade around $20, approaching their 52-week high of $21.55. Analysts are now looking for the WWE to earn $0.45 this year and $0.60 next year, a growth rate of nearly 25% year-over-year. That gives the company a forward P/E of nearly 33 and PEG Ratio of approximately 1.35. In my opinion, this puts shares on the pricey side.

Following today's news it will be important to pay attention to analyst notes and commentary to see if they change price targets or estimates for the balance of 2016 or 2017. It was just December 5th when Needham issued a positive note on the stock and reiterated its $25 price target. (See also, WWE Shares Higher In Early Trading)

Investors will surely be pleased with the growth in the WWE, but have to ask themselves if at these valuations will the growth justify the multiple? The WWE focuses on a unique segment of the market and its fans are likely to be more loyal because of it. Perhaps that loyalty is worth something. However, the stock is priced for growth and growth is what the stock most deliver.

SUMBER

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