News Corporation NWSA
Verdict: Sell. Fair value $24.23 against a price of $26.19 on 6 Jan 2026, 7% below the price.
In plain words
The case for: Narrow competitive moat provides durability. Industry tailwinds with growing market.
The case against: High industry disruption risk. Intense competitive pressure could compress margins. In FY2025, Net Income surged to $1.18B while Operating Cash Flow was only $0.98B, resulting in a....
Main risks
- Negative Long-Term Revenue Growth: Revenue has declined significantly from its 2022 peak ($10.38B vs $8.45B in 2025), resulting in a negative 3-year CAGR of -6.6%, indicating erosion in the core business.
- Poor Capital Allocation: The estimated 3-year ROIIC is -7.7%, suggesting that capital invested over the past three years has been value-destructive, generating lower operating profits.
- Low and Deteriorating Returns on Capital: The estimated current ROIC is very low at 3.6%, almost certainly below the company's cost of capital. The proxy TTM EBIT ($0.53B) has also declined from the estimated 2022 level (approx. $0.65B), suggesting deteriorating core profitability.
- In FY2025, Net Income surged to $1.18B while Operating Cash Flow was only $0.98B, resulting in a...
- Net Income exhibits extreme volatility: $0.62B (2022), $0.15B (2023), $0.27B (2024), and $1.18B...
- High industry disruption risk