Formula One Is Booming. Wall Street Thinks the Stock Is Still Underpriced
Formula One has become the kind of global property everyone wants a piece of. Cities compete to host races, advertisers pay up for access, and audiences keep growing.
Liberty Media Series C Liberty Formula One was badly run from 1950 until roughly 2016, by one portfolio manager's blunt assessment. When Liberty Media took over in 2017, it brought a fundamentally different approach to monetizing the sport.
US viewership on ESPN hit a record 1.3M in 2025, and Apple says streaming viewership is “way up” since taking over US broadcast rights this season.
Demand is beating supply on every front
F1’s revenue rests on three durable pillars: media rights, race promotion fees, and sponsorships.
Live sports continue to command premium broadcast deals, while a long queue of cities and countries competing for limited spots on the calendar gives F1 leverage over hosting fees. Sponsorships are growing just as quickly.
Bernstein analyst Ian Moore calculates sponsorships approaching $1.1B by 2027, up from a $268M base when Liberty took control in 2017. Six league-level deals were signed before Apple even aired its first US race.
The licensing opportunity is what most analysts think the market is still missing. Moore sizes the current royalty base at $80M to $150M, anchored by LEGO, Mattel, Disney, and Electronic Arts, with a credible path toward $175M to $310M by 2028.
Morgan Stanley’s Sean Diffley, who ranks the stock as his top US media and entertainment pick, sees plenty of runway left. F1 remains underpenetrated in the US and Asia, leaving room to grow audiences and attract more brands looking for access to its global fan base.
"Owning a team is cool, but owning a sport is even cooler."
Sean Diffley, Morgan Stanley
F1 also owns MotoGP now, giving Liberty another major motorsports property to grow. Guggenheim recently raised its FWONK price target to $134, pointing to sponsorship momentum, improving Las Vegas profitability, and upcoming media-rights renewals.
The risks aren't small
F1's Q2 2026 revenue fell nearly 40% year over year after several Middle East races were cancelled due to regional conflict.
The company still has until end of September to decide on Qatar and Abu Dhabi. An economic downturn would hurt live attendance, which is where the premium pricing lives.
And US audiences, while growing fast, are still dwarfed by football, basketball, and baseball. The sport's cachet depends on a luxury-brand perception that requires constant maintenance.
The stock has also lagged peers. TKO Group is up 16% over the past twelve months. Madison Square Garden Sports is up 93%.
FWONK is down marginally in that same window, which is either a warning or an entry point depending on where you think the growth goes.
What the valuation gap says
At roughly 46 times next year’s earnings, FWONK isn’t cheap. But sports franchises routinely command seven to ten times revenue, while F1 trades below that, generates real cash flow, and is buying back shares.
Citizens recently raised its price target to $120 after meeting with management, citing demand that continues to outstrip supply across F1’s business lines. Morgan Stanley has since lifted its target to $125, while analyst sentiment remains overwhelmingly bullish.
Morgan Stanley's Diffley says he's surprised how under-owned the stock is, calling it a fund flow beneficiary for investors hunting non-AI exposure with contractually locked-in revenue. The monetization engine, as one analyst put it, is just starting to rev up.
F1 has plenty of room to grow without needing America to become a racing nation overnight.