Today we're going to take a closer look at mid-cap Consumer Discretionary company New York Times Company, whose shares are currently trading at $41.87. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
The Market May Be Overvaluing New York Times Company's Earnings and Assets:
The New York Times Company, together with its subsidiaries, provides news and information for readers and viewers across various platforms worldwide. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 22.33 and an average price to book (P/B) ratio of 3.12. In contrast, New York Times Company has a trailing 12 month P/E ratio of 39.5 and a P/B ratio of 4.29.
New York Times Company's PEG ratio is 2.26, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
The Company Enjoys Exceptional EPS Growth:
| 2018-02-27 | 2019-02-26 | 2020-02-27 | 2021-02-25 | 2022-02-23 | 2023-02-28 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $1,676 | $1,749 | $1,812 | $1,784 | $2,075 | $2,308 |
| Gross Margins | 63.0% | 46.0% | 45.0% | 46.0% | 50.0% | 48.0% |
| Operating Margins | 11% | 11% | 10% | 10% | 13% | 11% |
| Net Margins | 0.0% | 7.0% | 8.0% | 6.0% | 11.0% | 8.0% |
| Net Income (MM) | $4 | $126 | $140 | $100 | $220 | $174 |
| Earnings Per Share | $0.03 | $0.75 | $0.84 | $0.6 | $1.3 | $1.04 |
| EPS Growth | n/a | 2400.0% | 12.0% | -28.57% | 116.67% | -20.0% |
| Diluted Shares (MM) | 164 | 167 | 168 | 168 | 169 | 167 |
| Free Cash Flow (MM) | $171 | $235 | $235 | $332 | $304 | $188 |
| Capital Expenditures (MM) | -$85 | -$77 | -$45 | -$34 | -$35 | -$37 |
| Net Current Assets (MM) | -$453 | -$261 | n/a | n/a | n/a | n/a |
New York Times Company has weak revenue growth and a flat capital expenditure trend, irregular cash flows, and just enough current assets to cover current liabilities. We also note that the company benefits from strong margins with a stable trend and exceptional EPS growth. However, the firm has slimmer gross margins than its peers.
