| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 50.37 | -46 |
| Intrinsic value (DCF) | 12.56 | -86 |
| Graham-Dodd Method | 12.93 | -86 |
| Graham Formula | n/a |
Formula One Group (FWONA) is a premier global motorsports entertainment company, best known for organizing the Formula 1 World Championship, the pinnacle of open-wheel racing. As a subsidiary of Liberty Media Corporation, FWONA holds exclusive commercial rights to F1, generating revenue through broadcasting deals, sponsorship agreements, race hosting fees, and merchandising. Operating in the Communication Services sector under the Entertainment industry, the company capitalizes on F1's massive global fanbase, with races held across multiple continents. Formula One Group benefits from long-term contracts with teams, circuits, and media partners, ensuring stable cash flows. The sport's growing popularity in emerging markets, coupled with strategic digital expansion (including F1 TV and esports), enhances its revenue diversification. Despite high operational costs, FWONA's unique position in elite motorsports provides strong branding opportunities and resilience against economic downturns due to its premium, globally recognized product.
Formula One Group (FWONA) presents a compelling investment case due to its monopolistic control over F1's commercial rights, global brand recognition, and diversified revenue streams. The company's recent push into digital platforms and expansion in key markets (e.g., U.S., Middle East) could drive long-term growth. However, risks include high dependence on sponsorship and broadcasting revenues, cyclicality in advertising spend, and significant debt ($2.99B). The lack of dividends and recent net losses (-$30M in FY) may deter income-focused investors, but strong operating cash flow ($567M) and a solid cash position ($2.63B) provide financial flexibility. The stock's low beta (0.83) suggests relative stability versus broader markets, making it a potential hedge in volatile conditions.
Formula One Group's competitive advantage stems from its exclusive ownership of F1's commercial rights, creating a near-monopoly in elite open-wheel racing. Unlike competitors, F1's global footprint (24 races across 5 continents in 2024) and century-old legacy make it irreplaceable in motorsports. Its hybrid revenue model—combining media rights, hosting fees, and sponsorships—reduces reliance on any single stream. However, FWONA faces indirect competition from other motorsports series (e.g., IndyCar, NASCAR) and entertainment alternatives (e.g., esports, streaming platforms). F1's premium positioning limits mass-market appeal but ensures high-value partnerships (e.g., Rolex, Aramco). The company's tech-forward approach (sustainability initiatives, advanced broadcasting) differentiates it from traditional racing series. Weaknesses include high cost structures (team payments, logistics) and susceptibility to geopolitical risks (race cancellations). Liberty Media's ownership provides strategic synergies but may prioritize broader corporate goals over F1-specific growth.