Watch WWE's Post-WrestleMania Sub Churn, Analyst Says

The risk going forward for World Wrestling Entertainment, Inc. WWE is estimating WWE Network churn once the 30-day free trial ends, according to FBN Securities analyst Robert Routh.

Routh, who has an Outperform rating on WWE shares, noted that the company's most popular event WrestleMania was held during the free trial period.

"Although determining this with any degree of certainty is more than difficult, we are estimating 2016 year-end total paying subscribers will come in at 1.494 million," Routh wrote in a note to clients.

Pacific Crest's Evan Wingren also mentioned that while the total demand for WrestleMania beat the estimates, churn was likely to lead to a decline in paid subscribers in the second quarter.

Related Link: WrestleMania Exceeded Even PacCrest's Expectations

Demand And Subscriber Numbers

WWE said its digital subscription service, WWE Network, reached a 1.82 million total subscribers following Sunday's WrestleMania event. This is a 39 percent increase from March 30, 2015, the day after WrestleMania last year.

"As far as WWE Network reaching a record number of subscribers, although the 1.82 million number was materially higher than we think anyone expected actual paid subscribers were lower at 1.454 million (1.1 million domestic and 345,000 international)," Routh said.

WWE Network attracted an average of about 1.29 million paid subscribers in the first quarter 2016, an increase of 39 percent increase from the first quarter 2015 average. Looking ahead, WWE sees average paid subscribers for the second quarter 2016 in range of 1.48 million – 1.55 million, representing an increase of approximately 22 – 27 percent from last year.

WWE announced that total domestic subscribers increased 24 percent to 1.39 million; total international subscribers climbed 126 percent to 434,000. Domestic and international paid subscribers reached 1.11 million and 345,000, respectively as of April 4.

Shares of WWE closed Thursday's trading at $16.00. They have dropped 13.7 percent this year and 9.4 percent in the last five days.