Fox Corporation provides their global audience with compelling news, entertainment, and sports programming. The company produces and distributes its material through various platforms such as television and the internet.
Some of the more iconic FOX brands include FOX News, FOX Sports, FOX Entertainment, and FOX Television Studios. These are brands that hold a deep cultural importance for the American and worldwide audience. FOX is famous for engaging and informative content, with innovative product offerings for various consumer demographics.
FOX’s pedigree in entertainment, news, and sports reportage continues to determine its strategy to leverage on current strengths while investing in novel initiatives. Its extensive commercial appeal for advertisers and distributors makes FOX an investor’s delight.
The most recent 10-day average volume of FOX stock is 5.21 million, according to the CNBC website. The source puts the corporation’s market cap at $23.15 billion, a year-to-day percentage change of 11.38 per cent.
Companies in FOX’s industry with a comparable market cap include Paramount Global – $24.0 billion – and Sirius XM Holdings Inc. – $25.1 billion. However, Paramount’s stock price is closer at $37.43; Sirius XM’s stock is $6.41. FOX’s P/E ratio at this time is 14.1, just under ten times that of Grupo Televisa Sab, the $6.1 billion television group.
Analysts’ Take on FOX Stock
Analyst consensus on FOX. is a “Buy,” not a “Strong Buy.” At a current price target of $47.32, none of the twenty-five analysts recommend selling FOX stock. Nine would rather that you hold, with a “Buy” and “Strong Buy” coming from 12 and 3 analysts respectively.
It is worth noting that FOX Corporation trades two classes of shares, namely the Class A Common Stock and Class B Common Stock. Both share classes have a par value of $0.01 per share.
FOX Class A stock are traded under the symbol FOXA, while Class B Common Stock is traded under the symbol FOX. Both classes are registered on the Nasdaq Global Select Market exchange.
For the three months ended December 31, 2021, company revenues increased 9 per cent, as against a corresponding fiscal 2021. This net revenue derived from higher advertising, affiliate fee, and other revenues. Higher average rates per subscriber is responsible for the rise in affiliate fee revenue, consequent upon contractual rate increases on current affiliate agreements, offset to some degree by a lower average number of subscribers.
Prior year affiliate fee credits was also absent, impacting the increase, as the coronavirus ravaged the world besides the under-delivery of college football games.
The reported higher advertising revenue primarily came from partnerships with college football, Major League Baseball (MLB), and the National Football League (NFL). Higher pricing at FOX News Media, growth at the streaming platform Tubi, and hosting more live events at the national sports networks due to the coronavirus in the prior year quarter. With presidential and congressional elections absent in the year, lower political advertising revenue is a given.
Other appreciating revenues come from acquisitions of entertainment production outfits, higher COVID-19-inspired sports sub-licensing revenues, and higher FOX Nation subscription revenues. This was partially offset by the impact of divestiture of FOX Corporation’s marketing businesses.
A Note on Tubi and FOX’s Advertising Revenue
FOX Corp’s acquisition of Tubi was a curious decision and no one could blame analysts who questioned the move. However, the free-to-watch supported streaming platform which MoffettNathanson Research expected to more than double its revenue in 2021 and triple it in 2023, is poised to play a critical role in the company’s growth strategy,
MoffettNathanson forecasts that Tubi could be responsible for $1.7 billion worth of annual advertising sales by 2025.
Given these impressive outlook and the posture within the company, Tubi looks set to grow from being responsible for around one-third of FOX’s television advertising revenue.
However, Tubi’s growth will impact the upward trajectory of other fronts, including advertising. Per the IAB, advertisers are on average, redirecting 21 per cent of the budgets from traditional (linear) to connected television streaming platforms.
The shift threatens FOX’s long-time cable and television units’ ad businesses. It may also impact affiliate fees. All of this might be a good thing for FOX, as it’ll prise away a slice of business from cable companies that had taken a significant piece of advertising pie from from FOX over the last few years.
Either way, the months ahead look bright for FOX Corporation. With a potential $1 billion revenue from Tubi alone, the company’s current $12 billion acre of fortune could get some enviable icing to top things out. FOX certainly looks like good stock you should buy, at least going by analyst predictions.
Note: Please do not invest money or assets in the financial markets that you cannot afford to lose. This article should not be construed to be investment advice and is for information purposes only