Lee Enterprises (LEE) AI Stock Analysis

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Lee Enterprises

(NASDAQ:LEE)

Rating:36Underperform

Price Target:

$7.00

▲(6.06%Upside)

Lee Enterprises' overall score reflects a challenging financial position with declining profitability and high leverage. The stock's technical indicators suggest bearish momentum. Valuation metrics, marked by a negative P/E ratio, further weigh on the score. Despite some positives from digital growth and strategic cost reductions, the impact of the recent cyber incident and ongoing cash flow issues keep the score low.

Lee Enterprises (LEE) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$41.05M

Dividend YieldN/A

Average Volume (3M)13.72K

Price to Earnings (P/E)―

Beta (1Y)1.10

Revenue Growth-7.29%

EPS Growth-258.59%

CountryUS

Employees2,674

SectorCommunication Services

Sector Strength86

IndustryPublishing

Share Statistics

EPS (TTM)-2.07

Shares Outstanding6,220,064

10 Day Avg. Volume15,157

30 Day Avg. Volume13,720

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)-1.66

Price to Sales (P/S)0.00

P/FCF Ratio-2.85

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$25.00

Price Target Upside278.79% Upside

Rating ConsensusHold

Number of Analyst Covering0

Lee Enterprises Business Overview & Revenue Model

Company DescriptionLee Enterprises, Incorporated provides local news and information, and advertising services in the United States. The company offers print and digital editions of daily, weekly, and monthly newspapers and publications; and web hosting and content management services. It also provides advertising and marketing services, such as audience extension, search engine optimization, search engine marketing, web and mobile production, social media services, and reputation monitoring and management. In addition, the company offers integrated digital publishing and content management solutions for creating, distributing, and monetizing multimedia content for media publications, universities, television stations, and niche publications. Further, it provides commercial printing services; distributes third party publications; and operates a digital marketing agency. The company was founded in 1890 and is based in Davenport, Iowa.

How the Company Makes MoneyLee Enterprises generates revenue primarily through advertising and subscription services. Advertising revenue is derived from sales of print and digital ads to local and national businesses. The company also earns money from subscription fees charged to readers for access to its digital and print news content. Additionally, Lee Enterprises benefits from partnerships with other media organizations, which can include content-sharing agreements and joint advertising sales initiatives. The company's earnings are influenced by factors such as readership trends, print circulation, digital engagement, and the overall economic environment affecting advertising budgets.

Lee Enterprises Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q2-2025)

% Change Since: -18.62%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong digital revenue growth and successful cost reductions. However, the significant impact of the cyber incident resulted in a net loss and challenges with cash flow and debt management. The launch of innovative AI products and support from Berkshire Hathaway are positive steps moving forward, but the incident's financial impact cannot be ignored.

Q2-2025 Updates

Positive Updates

Digital Revenue Growth

Total digital revenue grew by 4% year-over-year on a same-store basis. Digital subscription revenue continued to lead with a 20% year-over-year growth.

Innovative AI Product Launch

Launched a suite of AI products, including A.I. Enablement, aimed at providing local businesses with advanced tools for thriving in a competitive environment.

Cost Reduction and Efficiency

Executed approximately $40 million in annualized cost reductions in the second quarter, aimed at driving margin growth and lowering costs, particularly in print.

Asset Monetization

Closed over $6 million in asset sales year-to-date, with an additional $25 million to monetize, which will improve liquidity and facilitate debt repayment.

Support from Berkshire Hathaway

Berkshire Hathaway waived interest and basic rent payments for March, April, and May to provide short-term liquidity after the cyber incident.

Negative Updates

Cyber Incident Impact

A significant cyber event in February caused disruption in operations, impacting advertising revenue and subscription revenue due to limited product availability.

Net Loss and Cash Flow Challenges

Net loss totaled $12 million in the quarter, with minimal free cash flow due to the cyber incident and associated costs.

Debt and Balance Sheet Impact

The cyber incident hampered the ability to build and collect from customers, impacting accounts receivable and payable. The incident temporarily increased the principal debt balance.

Company Guidance

During the Lee Enterprises 2025 Second Quarter Conference Call, key guidance metrics were highlighted, emphasizing the company's digital transformation and recovery from a recent cyber incident. The call disclosed that Lee aims to achieve $450 million in digital revenue by 2028, with current annual digital revenue at $303 million. Over the past three years, digital subscription revenue has grown by 40% annually, while Amplified Digital Agency revenue has increased by 18% annually. In the second quarter, digital revenue grew by 4% year-over-year, with digital subscription revenue rising by 20%. The company also introduced AI-empowered products to bolster local businesses' competitiveness. Despite a net loss of $12 million in the quarter, Lee anticipates positive free cash flow in the second half of fiscal year 2025, facilitated by $40 million in annualized cost reductions and non-core asset sales.

Lee Enterprises Financial Statement Overview

Summary

Lee Enterprises is facing significant financial challenges with declining revenue, profitability, and cash flow metrics. The balance sheet shows high leverage and negative equity, posing substantial financial risks that need addressing for future stability.

Income Statement

Negative

Lee Enterprises shows declining revenue and profitability metrics. Gross and net profit margins have been negative, with a significant net loss in the TTM. The EBIT and EBITDA margins have also contracted, indicating profitability challenges.

Balance Sheet

Very Negative

The balance sheet reveals a negative stockholders' equity, indicating financial instability and high leverage. The debt-to-equity ratio is unfavorable due to the absence of equity, and the equity ratio is negative, suggesting solvency issues.

Cash Flow

Negative

The company faces negative free cash flow and operating cash flow, with declining free cash flow growth. The operating cash flow to net income ratio is negative, reflecting cash flow challenges and profitability issues.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
600.26M	611.38M	691.14M	780.97M	794.65M	618.00M
	Gross Profit
454.45M	594.57M	665.79M	750.87M	764.87M	593.76M
	EBIT
3.91M	4.55M	37.17M	73.97M	56.56M	50.28M
	EBITDA
22.32M	37.66M	69.01M	105.55M	97.75M	95.16M
	Net Income Common Stockholders
-43.28M	-25.84M	-5.27M	899.00K	22.75M	-1.26M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.11M	9.60M	14.55M	16.18M	26.11M	33.73M
	Total Assets
684.81M	649.17M	711.62M	744.04M	843.55M	864.06M
	Total Debt
493.87M	483.85M	500.08M	516.42M	548.91M	609.24M
	Net Debt
477.76M	474.25M	485.53M	500.23M	522.80M	575.51M
	Total Liabilities
674.39M	656.50M	687.91M	726.80M	786.85M	893.69M
	Stockholders Equity
7.91M	-9.89M	21.24M	15.01M	54.56M	-31.56M
Cash Flow		Free Cash Flow
-16.03M	-8.09M	-7.63M	-4.11M	42.60M	41.77M
	Operating Cash Flow
-6.30M	1.12M	-2.52M	3.43M	50.08M	49.87M
	Investing Cash Flow
5.50M	3.73M	7.98M	6.34M	-2.28M	-118.18M
	Financing Cash Flow
-8.44M	-9.80M	-7.09M	-20.27M	-55.42M	93.39M

Lee Enterprises Technical Analysis

Technical Analysis Sentiment

Negative

Last Price6.60

Price Trends

50DMA

8.35

Negative

100DMA

9.73

Negative

200DMA

11.46

Negative

Market Momentum

MACD

-0.51

Negative

RSI

41.60

Neutral

STOCH

40.50

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LEE, the sentiment is Negative. The current price of 6.6 is below the 20-day moving average (MA) of 7.18, below the 50-day MA of 8.35, and below the 200-day MA of 11.46, indicating a bearish trend. The MACD of -0.51 indicates Negative momentum. The RSI at 41.60 is Neutral, neither overbought nor oversold. The STOCH value of 40.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LEE.

Lee Enterprises Risk Analysis

Lee Enterprises disclosed 17 risk factors in its most recent earnings report. Lee Enterprises reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

Q4, 2024

Lee Enterprises Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NYT	80 Outperform	$9.29B	31.08	16.68%	1.00%	6.85%	21.26%
SSP	66 Neutral	$195.59M	2.42	11.23%	―	6.28%	―
Sector *	61 Neutral	$14.27B	5.87	-4.20%	3.70%	2.75%	-35.76%
GCI	56 Neutral	$505.20M	11.31	26.63%	―	-7.04%	―
CCG	49 Neutral	$68.17M	―	-16.65%	―	105.31%	95.66%
DALN	47 Neutral	$23.12M	0.78	160.90%	3.60%	-8.98%	―
LEE	36 Underperform	$41.05M	―	0.00%	―	-7.29%	-258.59%

* Communication Services Sector Average

Performance Comparison

LEE

Lee Enterprises

6.91

-5.39

-43.82%

DALN

DallasNews

4.32

0.37

9.37%

SSP

E. W. Scripps Company Class A

2.35

-0.44

-15.77%

NYT

New York Times

56.05

6.04

12.08%

GCI

Gannett

3.49

-0.56

-13.83%

CCG

Cheche Group

0.81

-0.19

-19.00%

Lee Enterprises Corporate Events

Business Operations and StrategyFinancial Disclosures

Lee Enterprises Reports Q2 2025 Revenue Growth

Positive

May 9, 2025

Lee Enterprises reported its second quarter fiscal 2025 results, highlighting a 20% year-over-year increase in digital-only subscription revenue and a 9% increase in revenue from its Amplified Digital® Agency. Despite a cyber security incident in February that incurred $2 million in restoration costs and impacted advertising revenue, the company has recovered and launched an AI solution to support local businesses. Cost reduction measures were implemented, resulting in $40 million in annualized savings, and the company anticipates improved financial performance in the latter half of fiscal year 2025.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.