New York Times’ stock (NYSE: NYT), a diversified media company that includes newspapers, internet businesses, television, and radio stations, is scheduled to report its Q2 2022 results on Wednesday, August 3. We expect NYT stock to see little to no movement with both earnings and revenues matching consensus expectations for its second-quarter results. For Q2, including The Athletic, NYT sees digital-only subscription revenue rising 16% to 18% y-o-y, and total subscription revenue up 7% to 9%. It also expects digital ad revenues to be flat to down in the low single-digits, with total ad revenue up between 2% and 5%. It should be noted that the company forecasts cost growth to slow down considerably in the second half of 2022.
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. NYT stock may remain under pressure for the foreseeable future due to macroeconomic concerns, but we believe it might rise in the longer term based on its strong digital subscription growth.
Our forecast indicates that NY Times’ valuation is $33 per share, which is only 3% higher than the current market price. Look at our interactive dashboard analysis on New York Times Earnings Preview: What To Expect in Fiscal Q2? for more details.
(1) Revenues expected to match consensus estimates
Trefis estimates NY Times’ Q2 2022 revenues to be around $553 Mil, in line with the consensus estimate. In Q1, the company’s revenue grew 14% y-o-y to $537 million, driven by a huge user boost from its acquisition of Wordle. Subscription revenues jumped on growth in the number of digital-only subscriptions as well as a migration to higher prices from introductory promotional pricing. That said, the company reported net additions of 387,000 digital subscribers in Q1, including those from The Athletic after that deal closed on Feb 1. This resulted in a total of 9.1 million total subscribers, with 10.4 million total subscriptions by the end of Q1. The media company began reporting its unique subscribers along with the growth of the individual subs from this first quarter. Of the 9.1 million subscribers, 8.33 million were paid digital-only subscribers, with 9.62 million paid digital-only subscriptions. The Athletic alone brought 1.1 million subscribers with 1.23 million subscriptions. The company has now set a new target of at least 15 million total subscribers by the end of 2027.
2) EPS is also likely in line with consensus estimates
NYT’s Q2 2022 earnings per share (EPS) is expected to come in at 19 cents per Trefis analysis, matching the consensus estimate. NYT earned 19 cents a share, down 27% y-o-y, excluding one-time items, in Q1. Higher costs due to its M&A strategy led to its EPS decline.
(3) Stock price estimate in line with the current market price
Going by our NYT’s Valuation, with an EPS estimate of around $1.07 and a P/E multiple of 31.0x in fiscal 2022, this translates into a price of $33, which is almost in line with 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.
With inflation rising and the Fed raising interest rates, New York Times has fallen 34% this year. Can it drop more? See how low can NYT stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
|S&P 500 Return||0%||-13%||84%|
|Trefis Multi-Strategy Portfolio||0%||-14%||240%|
 Month-to-date and year-to-date as of 8/1/2022
 Cumulative total returns since the end of 2016