Fox Corp (FOX, Financial) experienced a daily gain of 5.23%, and over the past three months, it has seen a gain of 10.47%. With an Earnings Per Share (EPS) of 2.13, the question arises: is the stock modestly undervalued? This article delves into a detailed analysis of Fox's valuation, providing insights into its financial strength, profitability, growth, and intrinsic value. Read on to uncover whether Fox Corp is a potential value investment.
About Fox Corp (FOX, Financial)
Fox Corp represents the assets not sold to Disney by its predecessor, Twenty First Century Fox, in 2019. The remaining assets include Fox News, the FOX broadcast network, FS1 and FS2, Fox Business, Big Ten Network, 28 owned and operated local television stations, Tubi, and the Fox Studios lot. The Murdoch family continues to control the successor firm, which represents a large-scale bet on the value of live sports and news in the U.S. market.
The company's current stock price stands at $32.77, while its estimated fair value, also known as GF Value, is $38.19. This discrepancy suggests that Fox Corp (FOX, Financial) might be modestly undervalued. The income breakdown of Fox is depicted in the following chart:
Understanding the GF Value
The GF Value is a proprietary measure that represents the current intrinsic value of a stock. It's calculated based on historical trading multiples, a GuruFocus adjustment factor based on past performance and growth, and future business performance estimates.
The GF Value Line on our summary page provides an overview of the fair value at which the stock should ideally be traded. If the stock price is significantly above the GF Value Line, it is overvalued, and its future return is likely to be poor. Conversely, if it is significantly below the GF Value Line, its future return will likely be higher.
The stock of Fox Corp (FOX, Financial) shows signs of being modestly undervalued, according to GuruFocus' valuation method. The GF Value estimates the stock's fair value based on three key factors: historical multiples, an internal adjustment based on the company's past business growth, and analyst estimates of future business performance. At its current price of $32.77 per share, Fox stock appears to be modestly undervalued.
Since Fox is relatively undervalued, the long-term return of its stock is likely to be higher than its business growth.
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