News Corp (NWS, Financial) has seen a 2.92% daily gain and a 27.81% three-month gain, with an Earnings Per Share (EPS) (EPS) of 0.47. But the critical question remains: is the stock fairly valued? To answer this, we delve into a comprehensive analysis of News Corp's valuation, financial strength, profitability, and growth. We invite you to read on and uncover the intrinsic value of News (NWS).
A Glimpse at News Corp (NWS, Financial)
News Corporation is a diversified media conglomerate with a significant presence in the U.S, the U.K., and Australia. Key brands include The Wall Street Journal, Herald Sun, and The Times. The company also has a substantial presence in the Australian pay-TV market through Fox Sports and Foxtel (both 65%-owned), while its 61%-owned REA Group is the dominant real estate classified business in Australia. In addition, it owns HarperCollins, one of the largest book publishers globally, and also has a substantial digital property advertising business (Move) in the U.S.
At its current price of $21.32 per share, News has a market cap of $12 billion. The stock appears to be fairly valued based on the GuruFocus Value calculation. The GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance.
Understanding the GF Value
The GF Value represents the current intrinsic value of a stock derived from our exclusive method. The GF Value Line on our summary page gives an overview of the fair value that the stock should be traded at. It is calculated based on three factors:
- Historical multiples (PE Ratio, PS Ratio, PB Ratio and Price-to-Free-Cash-Flow) that the stock has traded at.
- GuruFocus adjustment factor based on the company's past returns and growth.
- Future estimates of the business performance.
We believe the GF Value Line is the fair value that the stock should be traded at. The stock price will most likely fluctuate around the GF Value Line. If the stock price is significantly above the GF Value Line, it is overvalued and its future return is likely to be poor. On the other hand, if it is significantly below the GF Value Line, its future return will likely be higher.
As News is fairly valued, the long-term return of its stock is likely to be close to the rate of its business growth.
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