What Drove NYT’s Stock To Grow Over 2.5x in The Last Three Years?

February 27th, 2020 by Trefis Team
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NYT: New York Times logo
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New York Times

New York Times’ (NYSE: NYT) stock price gained 159% in the last 3 years, trading from under $15 in February 2017 to over $38 in February 2020. While part of the increase was due to the growth in revenues, a bulk of the improvement in the company’s stock price has come from over a 300% increase in its net income margin.

We have created an interactive dashboard on NYT’s Stock Price Change where we factorize the increase in NYT’s stock price, breaking it down into change in Revenue, Margins, number of shares, and P/E Multiple. We deep-dive into the 4 factors, along with forecasts here:

 #1. New York Times’ Total Revenue has grown 17% from $1.6 billion in 2016 to almost $1.8 billion in 2019 and is expected to grow by 6.5% to around $1.9 billion in 2020.
  • Overall, NYT revenue increased from $1.6 billion in 2016 to $1.8 billion in 2019, driven by the political climate in U.S. – which led to a substantial increase in the company’s digital revenues.
  • Revenue growth (year-over-year) of about $118 million in 2020 to be driven by about $56 million from Subscription revenues and $52 million from Other revenues.
  • We expect revenue to grow by 6.5% to about $1.9 billion in 2020, driven by the Presidential elections in the U.S. in November 2020.
  • NYT reported 4.4 million digital subscriptions, as well as 850,000 print subscriptions for a total of 5.3 million in 2019.

#2. Higher Revenues coupled with an increase in Net Income Margin from 1.9% in 2016 to 7.7% in 2019 boosted the Net Income figure from $29 million to $140 million over this period

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A sharp decline in 2017 was driven by pension settlement charges and higher operating costs. We expect net income to rise to $155 million in 2020

  • NYT’s net income grew from $29 million in 2016 to $140 million in 2019. This can be attributed to higher revenues and elevated margins.
  • Net income margin declined from 1.9% in 2016 to 0.3% in 2017. This was followed by a rise to 7.2% in 2018 and 7.7% in 2019.
  • We discuss the factors that impacted the margin in our dashboard.

#3. Despite a 3% increase in Share Count, an improvement in Net Income has helped EPS rise steadily over the years from 18 cents in 2016 to 84 cents in 2019

We expect the EPS figure to further increase in 2020.

#4. Price-To-Earnings (P/E) multiple for NYT has been volatile over the years but it was 45% lower in 2019 compared to 2016

The current P/E is higher than that for its peers Disney and Comcast.

See all Trefis Price Estimates and Download Trefis Data here

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