Roughly two years after the company launched its revolutionary WWE Network, Pacific Crest analyst Evan Wingren believes World Wrestling Entertainment, Inc. WWE 1.17% may be on the brink of turning a major corner in terms of earnings. Wingren believes WWE’s new business model provides the company with unprecedented operating leverage.

“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,” Wingren explains.

Pacific Crest now estimates 2017 incremental gross margins for the network to be around 80 percent, higher than previous projections.

“A core tenet of Internet distribution economics is dominance over a consumer relationship combined with heavy initial investment in fixed costs that, over time, creates operating leverage as the company increases its subscriber base and price,” Wingren notes.

Pacific Crest has also doubled…

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