New York Times (NYT) Last Update 11/18/22
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% of Stock Price
Revenue
Gross Profits
Free Cash Flow
New York Times
STOCK PRICE
DIVISION
% of STOCK PRICE
Subscription
66.7%
$23.12
Other Revenue
16.8%
$5.82
Advertising
16.5%
$5.71
Net Debt
1.3% $0.45
TOTAL
100%
$34.65
$34.20
Yours
Trefis Price
N/A
$35.16
Market
 
Top Drivers for Period
Key Drivers
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RECENT NEWS AND ANALYSIS

Potential upside & downside to trefis price

New York Times Company

VALUATION HIGHLIGHTS

  1. Subscription constitutes 67% of the Trefis price estimate for New York Times's stock.
  2. Other Revenue constitutes 17% of the Trefis price estimate for New York Times's stock.
  3. Advertising constitutes 16% of the Trefis price estimate for New York Times's stock.

WHAT HAS CHANGED?

NYT Tops Estimates in Q3

In Q3, NYT's revenue grew 8% year-over-year (y-o-y), mostly in line with expectations, to $547.7M as the company wrestled with the industry wide slowdown in digital advertising. That figure came as subscriptions continued to make up for advertising in the revenue stream. To break down the revenue gains further, advertising revenue dipped fractionally y-o-y to $110.5M, but subscription revenues rose 12% to $382.7M. Other revenue landed at $54.5M. Total subscriptions came in at 10.75M and digital-only subs were 10.02M. The company now set a new target of at least 15 million total subscribers by the end of 2027.

Note: NYT's FY'21 ended on December 26, 2021. Q3 FY'22 refers to the quarter that ended on September 25, 2022.

Q4 Guidance

For Q4, excluding The Athletic, NYT sees digital-only subscription revenue rising to about 20% y-o-y, and total subscription revenue up 10% to 13%. The digital ad revenues and the larger total ad revenues are expected to decline by about 10%. The company is changing its fiscal year to line up with the calendar year, fixing what was set to be a six-day offset. With the 2022 fiscal year now ending on Dec. 31, 2022, the company's fourth quarter will contain an extra six days compared with the fourth quarter of 2021.

NYT Adopts Acquisition Strategy To Boost Growth

As of now, the media company continues to grow its subscriber base of digital-only subscribers, but this growth is largely a result of discounted offers. In response to escalating costs and a fear of losing subscribers, the company has also not been able to raise its subscription prices. It is for these reasons NYT acquired the sports news website The Athletic - its largest acquisition to date of $550 million. The Times also bought the popular word game Wordle, which was a much smaller deal, yet more evidence that the company is seeking out external growth sources.

BUSINESS SUMMARY

The New York Times Co. (NYT) is a media company primarily in the newspaper business. Currently, the company makes money through advertising in its print newspapers, online advertising, and newspaper circulation fees. In 2011, the company launched its paid subscription service for NYTimes.com, which added an additional revenue stream of digital circulation. The company’s digital-only subscription products include News products, as well as its Crossword and Cooking products.

KEY TRENDS

Digital content increasingly gaining relevance

Online media provides more abundantly available information, at a faster rate and at cheaper prices when compared to print media. This has effectively rendered print newspapers obsolete, and online reading is made further easy by tablets/smartphones, both physical circulation and print advertising within newspapers should see a decline going forward.

Social and mobile to drive future growth

Social networking leader Facebook has initiated a unique concept of "frictionless sharing" through their Open Graph tools, which enables publishers to instantly get their articles/content shared across a user's network of friends. Various media companies like Yahoo! and Washington Post have adopted the Open Graph to increase user engagement. We expect more websites to join the bandwagon if they increase both web traffic and user engagement. Additionally, the growing penetration and bandwidth capabilities of smartphones and tablets would play a major role in increasing traffic and viewership for media companies. NYT has also made headway in this segment by releasing smartphone and tablet-specific apps.

First-Ever Price Hike For Digital Subscription Service

The price of the digital-only subscription to the main news product every four weeks increased to $17, from $15, the company mentioned during the Q1 2020 report. It is the first increase in the digital subscription price since The Times decided to charge readers for online content in 2011. The company set a new goal last year to reach 15 million subscriptions by 2027.

NYT's Cooking and Games Products Hit 1 Million Subs

NYT's digital products devoted to the Cooking and Games segments have hit 1 million subscriptions each. That milestone was nearby when the company reported its Q3 2021 earnings. Cooking launched in 2014 with 18,000 recipes, and now has more than 21,000 recipes. The Games offering started with the newspaper's Daily Crossword and introduced the Mini in 2014, followed by a number of popular games.