With A Slowdown in Advertising, What To Expect From NY Times’ Q1 Results?

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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 2024 results on Wednesday, May 8. We expect NYT stock to likely see little to no movement, with revenues and earnings matching consensus expectations for its first-quarter results. The company continues to wrestle with the industry-wide slowdown in digital advertising and a decline in print revenues, due to a tough macro climate. The media company has seen only modest revenue growth but improved operating results (due to its increasing revenue in non-subscription segments) since the pandemic. We expect a similar momentum in the upcoming first quarter results, as well. For Q1, NYT sees digital-only subscription revenue rising to about 11% to 14% year-over-year (y-o-y), and total subscription revenue up 7% to 9%. The total advertising revenues are expected to decrease by mid-single-digits. This reflects the ongoing low visibility the company sees in the advertising market.

NYT stock has seen little change, moving slightly from levels of $50 in early January 2021 to around $45 now, vs. an increase of about 35% for the S&P 500 over this roughly 3-year period. Overall, the performance of NYT stock with respect to the index has been quite volatile. Returns for the stock were -7% in 2021, -33% in 2022, and 51% in 2023. In comparison, returns for the S&P 500 have been 27% in 2021, -19% in 2022, and 24% in 2023 – indicating that NYT underperformed the S&P in 2021 and 2022. In fact, consistently beating the S&P 500 – in good times and bad – has been difficult over recent years for individual stocks; for heavyweights in the Communication Services sector including GOOG, META, and NFLX, and even for the megacap stars TSLA, MSFT, and AMZN. In contrast, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has outperformed the S&P 500 each year over the same period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics. Given the current uncertain macroeconomic environment with high oil prices and elevated interest rates, could NYT face a similar situation as it did in 2021 and 2022 and underperform the S&P over the next 12 months – or will it see a strong jump?

Our forecast indicates that NY Times’ valuation is $45 per share, in line with 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 in line with the consensus estimates

Trefis estimates NY Times’ Q1 2024 revenues to be around $592 Mil, in line with the consensus estimate. In Q4, NYT’s revenue grew marginally year-over-year (y-o-y) to $676.2 million due to relatively muted growth in its major revenue segment of Subscriptions. To break down the revenue gains further, subscription revenues rose 4% to $288.7 mil, advertising revenue grew 8% y-o-y to $164.1 million and, other revenue landed at $81.7 Mil, up 10% y-o-y. The total digital-only average revenue per user (ARPU) was $9.24 for Q4 2023, an increase of 3.5% y-o-y – due to subscribers graduating from promotional to higher prices and price increases on tenured non-bundled subscribers.

At the end of the year, The Times had 10.36 million subscribers, 9.7 million of them digital-only. The company continues to be on track for its target of at least 15 million total subscribers by the end of 2027.  For the full-year 2024, we expect NYT’s Revenues to grow 6% y-o-y to $2.6 billion.

2) EPS to likely match consensus estimates 

NYT’s Q1 2024 earnings per share (EPS) is expected to come in at 20 cents per Trefis analysis, in line with the consensus estimate. NYT adjusted earnings came in at 70 cents per share, up 19% y-o-y in Q4 2023.

(3) Stock price estimate in line with the current market price

Going by our NYT’s Valuation, with an EPS estimate of around $1.68 and a P/E multiple of 26.7x in fiscal 2024, this translates into a price of almost $45, nearly matching 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.

 Returns May 2024
MTD [1]
2024
YTD [1]
2017-24
Total [2]
 NYT Return 5% -8% 239%
 S&P 500 Return 2% 8% 129%
 Trefis Reinforced Value Portfolio 2% 1% 621%

[1] Returns as of 5/6/2024
[2] Cumulative total returns since the end of 2016

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