September 22, 2017

NYT – Market expectations are for material improvements in Uniform ROA, but management’s concerns about their growth outlook imply this may be unwarranted

  • The New York Times Company (NYT:USA) currently trades near recent highs relative to UAFRS-based (Uniform) Earnings, with a 19.5x Uniform P/E, implying fairly bullish expectations for the firm. However, given management’s concerns about subscriber growth and revenue growth, this may be unwarranted
  • Specifically, management appears concerned about the sustainability of growth in total subscribers and total advertising revenues. They may also lack confidence in their ability to support digital revenue growth. Should Uniform ROA fail to improve back to pre-2008 levels, as management sentiment suggests, multiple compression and equity downside would be warranted

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