NEW YORK (TheStreet) -- World Wrestling Entertainment (WWE - Get Report) was falling 14.3% to $24.01 Monday the day after its WrestleMania 30 event, and despite claims the WWE Network is on track to reach 1 million subscribers by the end of 2014.
In a press release WWE announced the WWE Network reached 667,287 subscribers in 42 days, and is on its way towards meeting the company's goal of 1 million subscribers by the end of the 2014. The network is currently available in the U.S., and will come to Canada, the U.K., New Zealand, Singapore, Hong Kong, and the Nordics in late 2014 or early 2015.
At WrestleMania 30 former UFC Champion Brock Lesnar beat The Undertaker's undefeated streak at WrestleMania, which shocked fans, but may have been a good move for the company financially.
TheStreet Ratings team rates WORLD WRESTLING ENTMT INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate WORLD WRESTLING ENTMT INC (WWE) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- WWE's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WWE has a quick ratio of 2.05, which demonstrates the ability of the company to cover short-term liquidity needs.
- Compared to its closing price of one year ago, WWE's share price has jumped by 221.01%, exceeding the performance of the broader market during that same time frame. Setting our sights on the months ahead, however, we feel that the stock's sharp appreciation over the last year has driven it to a price level which is now relatively expensive compared to the rest of its industry. The implication is that its reduced upside potential is not good enough to warrant further investment at this time.
- The gross profit margin for WORLD WRESTLING ENTMT INC is currently lower than what is desirable, coming in at 30.81%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -6.66% is significantly below that of the industry average.
- Net operating cash flow has decreased to $11.60 million or 47.45% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: WWE Ratings Report