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News Corporation Class A (NWSA)
:NWSA
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News Corp
(NASDAQ:NWSA)74Outperform
Positive Factors
Investment Portfolio Simplification
The divestment is further evidence of the company’s commitment to the simplification of its investment portfolio.
Strategic Moves
NWSA's exit from FOXTEL is seen as both a financial and strategic positive for the company.
Negative Factors
Advertising Environment
The firm pointed to a more challenging ad environment within News Media.
News Corp (NWSA) vs. S&P 500 (SPY)
Market Cap
$16.72B
Dividend Yield0.71%
Average Volume (3M)3.25M
Price to Earnings (P/E)39.0
Beta (1Y)0.94
Revenue Growth-1.51%
EPS Growth82.74%
CountryUS
Employees23,900
SectorCommunication Services
Sector Strength85
IndustryTraditional Media
Share Statistics
EPS (TTM)0.72
Shares Outstanding378,055,080
10 Day Avg. Volume3,431,379
30 Day Avg. Volume3,254,452
Financial Highlights & Ratios
PEG Ratio0.47
Price to Book (P/B)N/A
Price to Sales (P/S)1.84
Price to Cash Flow (P/CF)21.10
P/FCF Ratio21.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.67Price Target Upside38.30% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
News Corp Business Overview & Revenue Model
Company DescriptionNews Corp (NWSA) is a leading global media and information services company focused on creating and distributing authoritative and engaging content to consumers worldwide. Operating in various sectors, including news and information services, book publishing, digital real estate services, and subscription video services, News Corp's core products and services encompass well-known brands such as The Wall Street Journal, HarperCollins Publishers, and Realtor.com. The company leverages its diverse portfolio to deliver quality journalism and content across multiple platforms.
How the Company Makes MoneyNews Corp makes money through a diversified revenue model comprising several key streams. In the news and information services sector, revenue is generated through advertising, subscriptions, and licensing of content across its media properties, including newspapers, magazines, and digital platforms. The book publishing arm, HarperCollins, earns revenue through the sale of books in both digital and print formats. Digital real estate services, primarily through Realtor.com and other international platforms, contribute to revenue via online advertising and lead generation services for real estate professionals. Additionally, the company's subscription video services generate income from subscriptions and advertising sales. Strategic partnerships and acquisitions also play a crucial role in expanding News Corp's reach and revenue potential.
News Corp Financial Statement Overview
Summary
News Corp demonstrates solid financial health with strong profitability and cash flow metrics. Revenue growth has been sluggish, but the company has effectively managed costs and improved margins. The balance sheet shows increased leverage but remains stable with a strong equity base. Continued focus on revenue growth and debt management will be crucial for sustaining long-term financial stability.Income Statement
News Corp has shown a consistent increase in its net profit margin and EBIT margin in the TTM, indicating improved operational efficiency. However, the revenue growth rate is negative compared to the previous fiscal year, which is a concern. The gross profit margin has improved significantly, showcasing effective cost management.70
Positive
Balance Sheet
The company's debt-to-equity ratio has increased over time, indicating higher leverage, which may pose risks. The equity ratio remains stable, reflecting a balanced asset structure. The return on equity (ROE) has improved, signaling enhanced profitability for shareholders.65
Positive
Cash Flow
Operating cash flow remains strong with a positive free cash flow growth rate. The operating cash flow to net income ratio is favorable, suggesting healthy cash generation relative to profits. The company has managed its capital expenditures effectively, supporting positive free cash flow.78
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 9.81B | 10.09B | 9.88B | 10.38B | 9.36B | 9.01B | Gross Profit |
| 6.93B | 4.30B | 4.04B | 4.57B | 3.85B | 3.36B | EBIT |
| 851.00M | 805.00M | 230.00M | 1.02B | 671.00M | 2.20B | EBITDA |
| 1.40B | 1.38B | 1.24B | 1.73B | 1.29B | -695.00M | Net Income Common Stockholders |
| 559.00M | 266.00M | 149.00M | 623.00M | 330.00M | -1.54B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 58.00M | 1.96B | 1.83B | 1.82B | 2.24B | 1.52B | Total Assets |
| 2.20B | 16.68B | 16.92B | 17.22B | 16.77B | 14.26B | Total Debt |
| 841.00M | 4.05B | 4.09B | 4.02B | 3.43B | 2.40B | Net Debt |
| 783.00M | 2.09B | 2.26B | 2.19B | 1.19B | 888.00M | Total Liabilities |
| 1.32B | 7.67B | 7.98B | 8.08B | 7.63B | 5.87B | Stockholders Equity |
| 872.00M | 8.12B | 8.06B | 8.22B | 8.21B | 7.58B |
| Cash Flow | Free Cash Flow | ||||
| 654.00M | 602.00M | 593.00M | 855.00M | 847.00M | 342.00M | Operating Cash Flow |
| 1.07B | 1.10B | 1.09B | 1.35B | 1.24B | 780.00M | Investing Cash Flow |
| -302.00M | -524.00M | -574.00M | -2.08B | -1.29B | -427.00M | Financing Cash Flow |
| -639.00M | -441.00M | -501.00M | 404.00M | 699.00M | -472.00M |
News Corp Technical Analysis
Negative
27.96
Price Trends
28.26
Negative
28.20
Negative
27.59
Positive
Market Momentum
-0.12
Positive
42.15
Neutral
38.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWSA, the sentiment is Negative. The current price of 27.96 is below the 20-day moving average (MA) of 28.86, below the 50-day MA of 28.26, and above the 200-day MA of 27.59, indicating a neutral trend. The MACD of -0.12 indicates Positive momentum. The RSI at 42.15 is Neutral, neither overbought nor oversold. The STOCH value of 38.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NWSA.
News Corp Risk Analysis
News Corp disclosed 27 risk factors in its most recent earnings report. News Corp 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 0 New Risks
News Corp Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $158.27B | 41.64 | 11.44% | 0.72% | 13.68% | 49.90% | |
78 Outperform | C$114.51B | 37.88 | 19.38% | 1.24% | 7.14% | 5.24% | |
74 Outperform | $16.72B | 38.98 | 5.23% | 0.71% | -1.51% | 82.74% | |
69 Neutral | $7.74B | 26.73 | 15.92% | 1.10% | 6.59% | 26.68% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
59 Neutral | $579.73M | ― | -0.42% | 3.88% | -3.89% | -106.78% | |
48 Neutral | $521.69M | ― | -11.19% | ― | -5.79% | -10.12% |
* Communication Services Sector Average
Performance Comparison
NWSA
News Corp
27.96
1.68
6.39%
SPGI
S&P Global
497.00
73.50
17.36%
NYT
New York Times
49.22
5.65
12.97%
SCHL
Scholastic
21.43
-16.97
-44.19%
GCI
Gannett
3.47
1.37
65.24%
TSE:TRI
Thomson Reuters
252.42
41.81
19.85%
News Corp Earnings Call Summary
Earnings Call Date: Feb 5, 2025 | % Change Since: -2.85% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements, particularly in revenue and profitability growth, successful asset divestment, and strategic partnerships, resulting in credit rating upgrades. However, there were challenges in the News Media segment and specific market conditions like the US housing market. Despite these challenges, the overall tone was positive due to strong performance in key growth areas and strategic advancements.Highlights
Revenue and Profitability Growth
Revenues on a continuing operations basis increased 5% to $2.24 billion, while profitability rose 20% to $478 million. Net income from continuing operations surged 58% to $306 million compared to the same quarter in the previous year.
Foxtel Sale to DAZN
News Corp agreed to sell Foxtel to DAZN for AUD 3.4 billion, which is approximately seven times Foxtel's fiscal 2024 EBITDA. This transaction is expected to have a meaningful impact on News Corp's balance sheet.
Credit Rating Upgrade
Following the Foxtel sale agreement, both S&P Global and Moody's upgraded News Corp's credit rating to investment grade.
Digital Real Estate Segment Performance
Digital Real Estate revenue increased 13% to $473 million and segment EBITDA margin by 26% to $185 million. Realtor.com saw accelerated growth in rental, seller, and new homes revenues.
Dow Jones Growth
Dow Jones revenue grew 3% to $600 million, with segment EBITDA expanding 7% to $174 million. Digital circulation revenue grew at its fastest pace in two years.
Book Publishing Success
Book Publishing reported revenue growth of 8% to $595 million and segment EBITDA surged 19% to $101 million. Audio revenue increased by 13%.
Lowlights
News Media Revenue Decline
News Media revenue fell by 2% to $570 million, though segment EBITDA grew by 30%.
Factiva Customer Dispute
A customer dispute led to an over 300 basis point adverse impact on Dow Jones' professional information business revenue.
Challenges in US Housing Market
Realtor.com faced a hostile housing market with 30-year mortgage rates above 7%, impacting lead volumes and average monthly unique users.
Company Guidance
During News Corp's second quarter fiscal 2025 earnings call, the company reported a 5% increase in revenues from continuing operations, reaching $2.24 billion, with profitability rising 20% to $478 million. Key performance metrics included a 58% increase in net income from continuing operations to $306 million and an EPS of $0.40, up from $0.28 in the prior quarter. The company's margin also improved from 18.7% to 21.4%. The Digital Real Estate segment saw a 13% revenue increase to $473 million, while Dow Jones revenue grew 3% to $600 million. Book Publishing revenue expanded 8% to $595 million. News Corp plans to sell Foxtel for AUD 3.4 billion, which will enhance its balance sheet and maintain a 6% stake in DAZN. The company expects the transaction to close in the second half of the fiscal year, subject to regulatory approvals.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.