What To Watch For In NY Times’ Stock Post Q1?

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New York Times’ stock (NYSE: NYT), a diversified media company that includes newspapers, internet businesses, television, and radio stations, is scheduled to report its Q1 2022 results on Wednesday, May 4. We expect NYT stock to trade higher due to revenues and earnings beating expectations in its first-quarter results. New York Times expects its total subscription revenues to increase in the range of 11% to 15% y-o-y in the fiscal first quarter of 2022. Further, the company’s total advertising revenues are also expected to grow in the range of 17% to 21% y-o-y. Also, NYT’s adjusted operating costs are estimated to rise in the range of 18% to 22%.

By the end of the fourth quarter, the Times had about 8.8 million subscribers across both digital and print platforms (of which 91% were digital subs). And, after completing the $550 million acquisition of the sports news website, The Athletic, on Feb 1, the company surpassed its goal of hitting 10 million subscribers by 2025. The company now set a new target of at least 15 million total subscribers by the end of 2027.

Our forecast indicates that NY Times’ valuation is $44 per share, which is 10% higher than the current market price. Look at our interactive dashboard analysis on New York Times Earnings Preview: What To Expect in Fiscal Q1? for more details.

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(1) Revenues expected to be slightly ahead of consensus estimates

Trefis estimates NY Times’ Q1 2022 revenues to be around $556 Mil, 2% ahead of the consensus estimate. The company performed well in its fiscal fourth quarter and also boosted its dividend and set a new stock buyback. NYT’s Q4 revenues grew 17% year-over-year (y-o-y) to $594 million, as it benefited from stronger-than-expected uptake of digital products. In addition, the company’s adjusted operating net income increased 12% y-o-y to $109 million, as higher advertising, subscription, and other revenues more than offset higher costs. It should be noted that NYT plans to begin reporting unique subscribers along with the growth of the individual sub from the first quarter. For the full year of 2022, we forecast NYT’s Revenues to be $2.3 billion, up 12% y-o-y.

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. That said, the competitive market remains fierce. All this explains why NYT acquired The Athletic – its largest acquisition to date. The Times also bought Wordle, which was a much smaller deal, yet more evidence that the company is seeking out external growth sources.

Note that subscription revenue, which made up 66% of The Times’ revenue in fiscal 2021, is expected to grow only 11-15% y-o-y. It includes 2-4 points of growth from The Athletic, which deal will close in the first quarter of fiscal 2022. However, the company’s operating costs are anticipated to grow at an expected rate of 18 to 22% y-o-y – faster than the revenue growth, thanks to its M&A strategy.

2) EPS is also likely to be comfortably ahead of consensus estimates

NYT’s Q1 2022 earnings per share (EPS) is expected to come in at 20 cents per Trefis analysis, 2 cents above the consensus estimate. In Q4, the company reported adjusted earnings per share of 43 cents, up 8% y-o-y. Higher sales and improved margins led to this increase in EPS.

(3) Stock price estimate higher than the current market price

Going by our NYT’s Valuation, with an EPS estimate of around $1.21 and a P/E multiple of 36.8x in fiscal 2022, this translates into a price of $44, which is almost 10% higher than the current market price.

It is helpful to see how its peers stack up. NYT Peers shows how NYT’s stock compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

Returns May 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 NYT Return 4% -17% 201%
 S&P 500 Return 1% -13% 86%
 Trefis Multi-Strategy Portfolio 0% -17% 228%

[1] Month-to-date and year-to-date as of 5/3/2022
[2] Cumulative total returns since the end of 2016

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