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Shares of World Wrestling Entertainment will rise 24 percent in the next year as the large investment in its online WWE Network starts to pay off as the service reaches critical mass, according to Pacific Crest.
"We believe WWE's model is at an inflection point, and that it is on the cusp of demonstrating profitability that greatly exceeds its historical earnings power," Pacific Crest's Evan Wingren wrote in a note to clients Wednesday.
He added, "A deep dive into WWE Network's cost structure suggests greater leverage than we previously thought."
