FWONA Stock Forecast & Price Target

Liberty Formula One Group's financial performance demonstrates significant growth, with operating revenues rising 20% to $871 million and Adjusted OIBDA increasing 3% to $160 million. The company's positive trajectory is further underscored by a robust uptick in revenues tied to the 2023 race schedule and improved media and sponsorship agreements, culminating in a 36% revenue increase to $988 million that outpaces previous estimates. Additionally, the uptick in TV viewership across multiple key regions enhances the company's market position and potential for future growth, particularly in non-European markets.

Liberty Formula One Group's stock outlook is negatively influenced by a lack of sustainable EBITDA growth, as evidenced by the lag in Adjusted EBITDA compared to revenue growth, attributed to higher team payments and race composition in 2Q24. Despite a high valuation multiple of 23.4x off 2023A EBITDA, the firm's need for a mere 5.5% EBITDA growth to meet its pre-tax hurdle rate of 9.8% raises concerns about its financial resilience amid potential market pressures. Additionally, the unsuccessful bid for Andretti Global highlights issues of competitive viability and commercial value within the series, further suggesting that the existing framework may face challenges in maintaining financial attractiveness moving forward.