Let’s delve into the numbers that may shape New York Times’ stock (NYSE: NYT) trajectory after Q4 2023 results on Wednesday, February 7.
1. Anticipated Revenues vs. Consensus Estimates
The conglomerate, which encompasses newspapers, internet ventures, television, and radio stations, is projected to see marginal movements in stock prices. This prediction is based on revenues and earnings aligning with market expectations for the final quarter. At present, NYT confronts the challenge of a digital advertising slowdown and dwindling print revenues, attributable to a harsh macro climate. In Q4, the company envisions digital-only subscription revenue to surge by approximately 6% to 9% year-over-year (y-o-y), with total subscription revenue anticipated to rise by 2% to 5%. Meanwhile, the estimate for total advertising revenues oscillates between a low-single-digit decrease and a mid-single-digit increase, mirroring the precarious visibility the company experiences in the advertising domain.
The path of the stock’s fortunes has been anything but smooth, with minimal fluctuations from $50 in early January 2021 to present levels, in contrast to a 30% surge in the S&P 500 during the same period. Despite a rollercoaster ride with -7% returns in 2021, -33% in 2022, and a formidable 51% rise in 2023, NYT has consistently lagged behind the S&P 500. This echoes the broader struggle evident in the performance of individual stocks like AMZN, TSLA, HD, GOOG, MSFT, and AAPL, all grappling to outdo the S&P 500 in recent years. Nevertheless, the Trefis High Quality (HQ) Portfolio, comprising 30 stocks, has outsmarted the S&P 500 annually over this period, offering superior returns with less risk in comparison. The looming macroeconomic environment, characterized by soaring oil prices and elevated interest rates, poses a probing question: will NYT mirror its 2021 and 2022 underperformance of the S&P in the upcoming year, or will it stage a robust rebound?
2. Revenue and Subscriber Milestones
The estimated revenue for Q4 2023 hovers around $680 million, in sync with the consensus projections. In Q3, NYT’s revenue soared by 9% year-over-year to $598.3 million, as the company grappled with digital advertising headwinds. Notably, subscriptions continued to supplant advertising in the revenue stream. Further dissecting the revenue surge, subscription revenues surged by 9% to $418.6 million, advertising revenue saw a 6% y-o-y increase to $117.1 million, and other revenue reached $62.7 million, marking a 15% y-o-y increase. The average digital-only revenue per user (ARPU) for Q3 2023 stood at $9.28, a 1.4% uptick from Q2 2023 and a robust 4.6% surge from Q3 2022.
NYT has crossed the 10 million subscriber milestone across its print and digital products and remains on track to achieve a minimum of 15 million total subscribers by the close of 2027. For the entirety of 2023, we anticipate NYT’s revenues to witness a 5% y-o-y ascent, reaching $2.4 billion.
3. Expected Earnings Per Share (EPS)
The anticipated Q4 2023 earnings per share (EPS) for NYT stands at 59 cents, according to Trefis analysis, aligning with consensus estimates. In Q3 2023, NYT registered earnings of 32 cents per share, marking a 45% y-o-y increase.
4. Stock Valuation and Peer Comparisons
Based on NYT’s valuation, with an estimated EPS of approximately $1.52 and a P/E multiple of 30.5x in fiscal 2023, the resulting price is almost $46, almost in line with the current market price. Evaluating how NYT stacks up against its peers will offer an illuminating perspective, providing useful insights into where NYT stands relative to comparable entities in the industry.
As of February 5, 2024, the returns for NYT signaled a 47% increase since the commencement of 2023. In comparison, the S&P 500 registered a 29% rise during the same period, underlining NYT’s robust performance. The Trefis Reinforced Value Portfolio managed to outshine both NYT and the S&P 500, reaping a commendable 38% increase. These point to the dynamic landscape of investment opportunities, where astute choices can maximize returns.
As investors await the Q4 2023 results, a blend of anticipation and caution hovers in the air. The vagaries and unpredictability of the market may defy logic and precedence, unveiling surprises that unleash ripples across the stock landscape. Where NYT’s fortunes will lie post the results remains an enigma, a question that only time will deign to answer.
