An experimental partnership between Facebook, Inc. (NASDAQ: FB) and World Wrestling Entertainment, Inc. (NYSE: WWE) seems to be bearing fruit, and one Wall Street analyst said Monday that it's good news for WWE investors.

The Analyst

Guggenheim's Michael Morris reiterated a Buy rating and $100 price target for WWE.

The Thesis

WWE and Facebook began streaming the first season of "WWE Mixed Match Challenge" exclusively on Facebook Watch in January. Facebook is now airing the second season of the show, which has increased the episode count from 12 to 14 and roughly doubled the length of each episode from about 22 minutes to about 45 minutes.

Facebook data suggests the show is a big hit, Morris said in the Monday note. (See his track record here.)

“This is not a surprise to us given WWE is a digital powerhouse," the analyst said.

WWE is the No. 1 sports channel on YouTube; has 22.9 billion video views year-to-date, up 61 percent year-over-year; fans have watched 840 million hours of WWE content, up 81-percent year-over-year; and the brand has 950 million social media followers, according to Guggenheim.

The second season of "Mixed Match Challenge" has expanded internationally to markets such as Australia, Brazil and Germany, Morris said.

While the show is still a relatively minor overall contributor for WWE, the analyst estimates the deals with Facebook for the first two seasons added roughly $10 million in EBITDA for WWE in 2018.

"Mixed Match Challenge" has reportedly drawn an average of 3.3 million viewers per episode in the most recent weeks, up from 3 million viewers per episode of season one, the analyst said.

WWE’s content has shown unique durability on Facebook Watch, Morris said: Facebook Watch shows average a 90-percent decline in viewership after their first episodes.

The success of "Mixed Match Challenge" opens the door for additional collaborations between WWE and Facebook in the future, and WWE even noted its “really positive” relationship with the social media platform on its most recent earnings call, according to Guggenheim.

Price Action

WWE shares were down 4.69 percent at $62.43 at the time of publication Monday, but are up 108.4 percent overall in 2018.

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Photo courtesy of WWE.