WWE is the IBD Stock Of The Day for Thursday. The entertainment and wrestling giant sits on three straight quarters of earnings growth and five straight quarters of revenue growth despite executive controversies and shake-ups. WWE stock is up nearly 40% year-to-date and with a 12-month gain of 22%.
In July, Stephanie McMahon and Nick Khan were officially appointed to serve as co-CEOs following the departure of Vince McMahon.
Vince McMahon, Stephanie's father as well as WWE founder and longtime CEO, stepped down after a June investigation into payments to former employees to cover up sexual misconduct. In total, there were $19.6 million in unrecorded expenses made by McMahon before leaving the company, which dated back to 2006.
Meanwhile, Stephanie McMahon's husband, Paul "Triple H" Levesque, was appointed chief creative officer in early September to assume a hefty portion of the two McMahons' former duties.
Despite the executive shake-ups, WWE managed to just beat expectations for its fourth-quarter results in August. WWE earnings jumped 70% over the year to 58 cents per share, while revenue climbed 23% to $328.2 million.
WWE is expanding its international footprint by securing streaming deals with Disney, Foxtel Group and NBCUniversal, which is owned by Comcast. It is also adding more overseas events in Saudi Arabia, the U.K. and Ireland.
Its premium live events — WrestleMania, WrestleMania Backlash and Hell in a Cell — were the most viewed in its history. And the company raised its full-year guidance to adjusted operating income of $370 million to $385 million vs. the previous outlook of $360 million to $375 million.
WWE Stock Analysis
WWE stock rose 0.9% to 69.19 on Thursday, just below its 50-day line. Aggressive investors might look for an early entry above 70.62. The official buy point is 75.33 for its flat base.
The relative strength line is already at record highs.
WWE stock broke out of a cup-with-handle base in mid-June and rose 28% before basing again.
WWE's Relative Strength Rating is at a new 52-week high of 95, indicating strong performance against its peers in the S&P 500 over the past year. WWE has an EPS Rating of 97 following its quarters of strong earnings growth.
And the stock has a muscular 95 Composite Rating out of a best-possible 99. The Composite Rating combines a number of key technical indicators into one easy-to-read score.
You can follow Harrison Miller for more stock news and updates on Twitter @IBD_Harrison
