We've been asking ourselves recently if the market has placed a fair valuation on Fox. Let's dive into some of the fundamental values of this Large-Cap Industrials company to determine if there might be an opportunity here for value-minded investors.
a Lower P/B Ratio Than Its Sector Average but Its Shares Are Expensive:
Fox Corporation operates as a news, sports, and entertainment company in the United States (U. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 24.03 and an average price to book (P/B) ratio of 2.89. In contrast, Fox has a trailing 12 month P/E ratio of 13.3 and a P/B ratio of 2.13.
Fox has moved 63.8% over the last year compared to 11.4% for the S&P 500 — a difference of 52.4%. Fox has a 52 week high of $58.74 and a 52 week low of $32.76.
EPS Trend Sustained Primarily by Reducing the Number of Shares Outstanding:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $11,389 | $12,303 | $12,909 | $13,974 | $14,913 | $13,980 |
| Operating Margins | 20% | 12% | 23% | 12% | 12% | 15% |
| Net Margins | 14% | 9% | 17% | 9% | 8% | 11% |
| Net Income (M) | $1,643 | $1,062 | $2,201 | $1,233 | $1,253 | $1,554 |
| Net Interest Expense (M) | $203 | $369 | $395 | -$371 | -$218 | -$47 |
| Depreciation & Amort. (M) | $212 | $258 | $300 | $363 | $411 | $389 |
| Diluted Shares (M) | 620 | 598 | 573 | 543 | 482 | 462 |
| Earnings Per Share | $2.57 | $1.62 | $3.61 | $2.11 | $2.33 | $3.13 |
| EPS Growth | n/a | -36.96% | 122.84% | -41.55% | 10.43% | 34.33% |
| Free Cash Flow (M) | $2,289 | $2,006 | $2,155 | $1,577 | $1,443 | $1,495 |
| CAPEX (M) | $235 | $359 | $484 | $307 | $357 | $345 |
| Total Debt (M) | $6,753 | $7,949 | $7,954 | $7,208 | $8,445 | $7,200 |
| Net Debt / EBITDA | 1.95 | 2.0 | 1.15 | 1.53 | 2.01 | 1.56 |
| Current Ratio | 3.52 | 3.81 | 2.97 | 3.37 | 2.29 | 2.5 |
Fox has an excellent current ratio of 2.5, growing revenues and a flat capital expenditure trend, and healthy leverage levels. However, the firm suffers from EPS growth achieved by reducing the number of outstanding shares and positive cash flows. Finally, we note that Fox has decent operating margins with a negative growth trend.
