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News Corp (NWSA)
NASDAQ:NWSA
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News Corp
(NASDAQ:NWSA)
Rating:74Outperform
Price Target:
$32.00
▲( 14.70% Upside)
Positive Factors
Earnings Performance
NWSA delivered a solid 3Q beat with revenue up 1% and EBITDA 8% ahead of expectations.
Potential Spin-Off
A REA spin may create value by re-rating the core of News Corp and eliminating the market discount on the current 61% REA stake.
Strategic Moves
NWSA's exit from FOXTEL is seen as both a financial and strategic positive for the company.
Negative Factors
Ad Environment
The firm pointed to a more challenging ad environment within News Media.
Capital Requirement
Increasing the REA stake by 19% may require $3.9 billion in capital, with identified sources including the pending sale of Foxtel and selling a portion of Move to REA.
Murdoch Trust Dispute
A loss in the Murdoch family trust case may result in News Corp moving to a single class of shares, potentially benefiting shareholders.
News Corp (NWSA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$16.66B
Dividend Yield0.72%
Average Volume (3M)2.99M
Price to Earnings (P/E)32.7
Beta (1Y)0.84
Revenue Growth-5.43%
EPS Growth135.46%
CountryUS
Employees23,900
SectorCommunication Services
Sector Strength86
IndustryEntertainment
Share Statistics
EPS (TTM)0.17
Shares Outstanding377,202,970
10 Day Avg. Volume3,110,935
30 Day Avg. Volume2,992,166
Financial Highlights & Ratios
PEG Ratio1.85
Price to Book (P/B)1.96
Price to Sales (P/S)0.00
P/FCF Ratio20.96
Enterprise Value/Market Cap1.06
Enterprise Value/Revenue0.46
Enterprise Value/Gross Profit1.89
Enterprise Value/Ebitda2.99
Forecast
1Y Price Target
$39.00Price Target Upside39.78% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
News Corp Business Overview & Revenue Model
Company DescriptionNews Corp (NWSA) is a global media and information services company headquartered in New York City. It operates in several sectors, including news and information services, book publishing, digital real estate services, and subscription video services. The company owns prominent brands such as The Wall Street Journal, HarperCollins Publishers, and Realtor.com, providing a diverse range of products and services that appeal to consumers and businesses worldwide.
How the Company Makes MoneyNews Corp generates revenue through various streams across its diverse business segments. In the news and information services sector, the company earns money primarily from advertising, circulation, and subscription revenues, particularly from its flagship publications like The Wall Street Journal and The Times. The book publishing segment, led by HarperCollins Publishers, contributes to revenue through book sales across multiple formats, including print, digital, and audio. Digital real estate services, such as those provided by Realtor.com, generate income through advertising and lead generation services for real estate agents and brokers. Additionally, News Corp's subscription video services, including pay-TV distribution and licensing of content, further diversify its revenue streams. Key partnerships with other media and technology companies, along with strategic acquisitions, enhance its content distribution capabilities and market reach, contributing significantly to its overall earnings.
News Corp Financial Statement Overview
Summary
News Corp's financial performance is characterized by improved profitability and cash flow metrics despite a decline in revenue. The company has managed to enhance its operational efficiency and reduce leverage, positioning it well for future growth. However, maintaining revenue growth remains a challenge in the competitive entertainment industry.Income Statement
News Corp showed a stable gross profit margin with a TTM figure of 100%. The net profit margin improved to 5.18% in TTM from 2.64% annually. Revenue declined by 6.72% in TTM compared to the previous year, indicating potential growth challenges. However, the EBIT margin improved to 10.16% from 7.98% annually, suggesting operational efficiency gains. The EBITDA margin also increased, reflecting strong earnings performance.78
Positive
Balance Sheet
The debt-to-equity ratio improved to 0.36 in TTM, reflecting a reduction in leverage. The return on equity increased to 5.94% in TTM from 3.28% annually, showing improved profitability. The equity ratio remained stable at around 49.5%, indicating solid financial stability. However, maintaining a high equity ratio is crucial to mitigate financial risk.75
Positive
Cash Flow
Free cash flow increased by 34% in TTM, demonstrating strong cash generation. The operating cash flow to net income ratio was 2.46, indicating robust cash flow relative to earnings. The free cash flow to net income ratio was 1.66, reflecting efficient cash flow management. Overall, the cash flow metrics highlight healthy financial operations.82
Very Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 9.40B | 10.09B | 9.88B | 10.38B | 9.36B | 9.01B | Gross Profit |
| 9.40B | 10.09B | 4.04B | 4.57B | 3.85B | 3.36B | EBIT |
| 955.00M | 805.00M | 230.00M | 1.02B | 671.00M | 2.20B | EBITDA |
| 1.57B | 1.36B | 1.24B | 1.73B | 1.29B | -695.00M | Net Income Common Stockholders |
| 487.00M | 266.00M | 149.00M | 623.00M | 330.00M | -1.54B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.10B | 1.96B | 1.83B | 1.82B | 2.24B | 1.52B | Total Assets |
| 16.58B | 16.68B | 16.92B | 17.22B | 16.77B | 14.26B | Total Debt |
| 2.92B | 4.05B | 4.09B | 4.02B | 3.43B | 2.40B | Net Debt |
| 828.00M | 2.09B | 2.26B | 2.19B | 1.19B | 888.00M | Total Liabilities |
| 7.50B | 7.67B | 7.98B | 8.08B | 7.63B | 5.87B | Stockholders Equity |
| 8.20B | 8.12B | 8.06B | 8.22B | 8.21B | 7.58B |
| Cash Flow | Free Cash Flow | ||||
| 807.00M | 602.00M | 593.00M | 855.00M | 847.00M | 342.00M | Operating Cash Flow |
| 1.20B | 1.10B | 1.09B | 1.35B | 1.24B | 780.00M | Investing Cash Flow |
| -379.00M | -524.00M | -574.00M | -2.08B | -1.29B | -427.00M | Financing Cash Flow |
| -588.00M | -441.00M | -501.00M | 404.00M | 699.00M | -472.00M |
News Corp Technical Analysis
Positive
27.90
Price Trends
26.99
Positive
27.53
Positive
27.47
Positive
Market Momentum
0.32
Positive
54.17
Neutral
18.18
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NWSA, the sentiment is Positive. The current price of 27.9 is above the 20-day moving average (MA) of 27.87, above the 50-day MA of 26.99, and above the 200-day MA of 27.47, indicating a bullish trend. The MACD of 0.32 indicates Positive momentum. The RSI at 54.17 is Neutral, neither overbought nor oversold. The STOCH value of 18.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $23.66B | 13.69 | 16.89% | 0.98% | 15.70% | 26.73% | |
80 Outperform | $23.66B | 12.54 | 16.89% | 1.07% | 15.70% | 26.73% | |
74 Outperform | $16.66B | 32.69 | 5.88% | 0.72% | -5.43% | 135.46% | |
60 Neutral | $14.12B | 6.43 | -3.57% | 3.69% | 2.49% | -35.43% | |
56 Neutral | $8.51B | ― | -28.56% | 1.69% | -4.50% | -898.86% | |
56 Neutral | $22.27B | ― | -27.69% | ― | -5.58% | -254.85% | |
52 Neutral | $8.51B | ― | -28.56% | 0.88% | -4.50% | -898.86% |
* Communication Services Sector Average
Performance Comparison
NWSA
News Corp
27.90
1.47
5.56%
PARA
Paramount Global Class B
11.97
0.18
1.53%
FOXA
Fox
55.04
21.92
66.18%
FOX
Fox
50.43
19.72
64.21%
PARAA
Paramount Global
22.70
2.29
11.22%
WBD
Warner Bros
9.00
1.13
14.36%
News Corp Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q3-2025)
| % Change Since: -2.04%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook with strong performance in key segments such as Dow Jones and Digital Real Estate Services, along with strategic gains from the sale of Foxtel. However, challenges in the News Media segment and issues with Factiva and Realtor.com indicated some areas of concern. Despite these challenges, the company's strategic focus on digital growth and asset realignment provided a solid platform for continued success.Q3-2025 Updates
Positive Updates
Significant Increase in Net Income
Net income from continuing operations rose 67% to $107 million in the third quarter compared to the prior year.
Strong Performance by Dow Jones
Dow Jones posted a 6% revenue growth with a 12% surge in profitability and a margin increase from 21.7% to 23%. Digital circulation revenue expanded 14%, marking the fastest growth rate in almost three years.
Successful Sale of Foxtel
The sale of Foxtel to DAZN removed $724 million of debt from the balance sheet and resulted in a 6% equity interest in the fast-growing sports streaming platform DAZN.
Digital Real Estate Services Growth
Digital Real Estate Services saw profitability surge 19% on a 5% increase in revenues, with a notable margin improvement from 26.8% to 30.5%. REA posted 6% revenue growth, or 11% on a constant currency basis.
Book Publishing Revenue Growth
Book Publishing segment revenues expanded by 2% to $514 million, with EBITDA rising 3% to $64 million.
Negative Updates
Challenges in News Media Segment
News Media segment faced an 8% decrease in revenue due to tougher advertising conditions. However, segment EBITDA grew 22% due to cost savings initiatives.
Factiva Revenue Impact
A customer dispute resulted in a 200 basis point adverse impact on professional information business revenues at Dow Jones, particularly affecting the Factiva product.
Realtor.com Lead Volume Decline
Realtor.com lead volumes declined 17% year-over-year, while average monthly unique users fell 8% to 66 million due to shifts in audience acquisition strategies and persistent affordability issues.
Company Guidance
In the third quarter of fiscal year 2025, News Corp reported robust financial performance, showcasing a strategic transformation towards digital growth and a focus on three core pillars: Dow Jones, Digital Real Estate, and Book Publishing. Net income from continuing operations surged by 67% to $107 million, with revenues growing by 1% to $2 billion despite currency headwinds. Total segment EBITDA increased by 12%, enhancing the overall margin from 13% to 14.4%. Adjusted revenues rose 2%, and adjusted total segment EBITDA grew by 15%. Earnings per share from continuing operations doubled to $0.14, while adjusted EPS increased to $0.17 from $0.13 in the previous year. The sale of Foxtel to DAZN marked a strategic move, eliminating $724 million of debt and securing a 6% equity stake in DAZN. Dow Jones posted a 6% revenue increase, with digital circulation revenue up by 14% and digital ARPU showing year-over-year improvement. Digital Real Estate Services saw profitability soar by 19%, and Book Publishing revenues grew by 2% to $514 million. News Media EBITDA grew by 22%, underscoring successful digital partnerships and cost discipline. Overall, the company's transformation is driven by strategic asset realignment, cost discipline, and an emphasis on intellectual property, with a focus on maximizing shareholder returns.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.