Up 6% so far. What’s next for NY Times stock after Q2 results?

Shares of the New York Times (NYSE: NYT), a diversified media company that includes newspapers, online businesses, television, and radio stations, are scheduled to report their second-quarter 2024 results on Wednesday, August 7. We expect NYT shares to likely trade lower, with revenue and earnings slightly off consensus expectations for its second-quarter results. The company continues to grapple with an industry-wide slowdown in print advertising and revenue. The media company has seen only moderate revenue growth but improved operating results (due to rising revenue in non-subscription segments) since the pandemic. We also expect similar momentum in its upcoming second-quarter results. For the second quarter, NYT is forecasting digital-only subscription revenue to grow about 11% to 14% year-over-year (YoY), and total subscription revenue to grow 6% to 8%. Total advertising revenue is expected to decline by low single digits.

NYT stock has seen little movement, moving slightly from $50 in early January 2021 to around $52 today, compared with a gain of around 45% for the S&P 500 over that roughly three-year period. Overall, NYT stock’s performance relative to the index has been quite volatile. Stock returns were -7% in 2021, -33% in 2022, and 51% in 2023. In comparison, the S&P 500’s returns were 27% in 2021, -19% in 2022, and 24% in 2023 – indicating that NYT underperformed S&P in 2021 and 2022. In fact, consistently beating the S&P 500 – in good times and bad – has been tough on individual stocks in recent years; for communications services giants including GOOG, META and NFLX, and even for capitalization giants like TSLA, MSFT and AMZN.

In contrast, the Trefis High Quality portfolio, consisting of 30 stocks, has outperformed the S&P 500 every year in the same period of time. Why? As a group, HQ Portfolio stocks have delivered better returns with less risk compared to the benchmark index; less of a rollercoaster ride as seen in HQ Portfolio’s performance metrics. Given the current uncertain macro environment with high oil prices and elevated interest rates, could NYT face a similar situation to 2021 and 2022? underperform the S&P in the next 12 months – or will there be a sharp increase?

Our forecast indicates that the NY Times is valued at $48 per share, which is 8% lower than the current market price. Check out our interactive dashboard analysis at New York Times Results Preview: What can we expect in the second quarter of the fiscal year? for more details.

(1) Revenues are expected to be slightly below consensus estimates

Trefis estimates that NY Times revenue in Q2 2024 will be around $621 million, slightly below consensus. In Q1, NYT revenue increased 6% year-over-year (YoY) to $594 million, driven by 8% YOY growth in its core revenue segment, subscriptions. To further break down the revenue growth, subscription revenue rose to $429 million, advertising revenue fell 2% YOY to $104 million, and other revenue came in at $61 million, up 8% YOY. Total average revenue per digital-only user was $9.21 in Q1 2024, up 1.9% YOY, due to subscribers switching from promotional pricing to higher pricing and price increases for non-bundled subscribers.

At the end of the first quarter, the Times had 10.55 million subscribers, including 9.9 million digital-only subscribers. The company remains on track to reach its goal of at least 15 million subscribers by the end of 2027. For full-year 2024, we expect NYT revenue to grow 6% year-over-year to $2.6 billion.

2) EPS likely slightly off consensus estimates

NYT earnings per share in the second quarter of 2024 are expected to be 38 cents, according to Trefis analysis, slightly below consensus estimates. NYT’s adjusted earnings were 31 cents per share, up 63% year-over-year in the first quarter of 2024.

(3) Estimated share price lower than current market price

Based on NYT’s valuation, with projected earnings per share of around $1.82 and a P/E multiple of 26.4x in fiscal 2024, this translates to a price of almost $48, down 8% from the current market price.

It’s useful to see how their competitors stack up. NYT Peers shows how NYT stock stacks up against its competitors on important metrics. You can find other useful comparisons for companies across industries at Peer Comparisons.

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