NWSA News Corp (Class A)
Margins are improving, but consolidated value sits near $20; the market prices in a sum-of-parts unlock.
The story
News Corp is a holding company built around three things: Dow Jones (WSJ, Barron's, Factiva, risk and compliance data), a majority stake in REA Group's Australian property portals, and HarperCollins, plus a declining legacy news business in Australia and the UK. Revenue is shifting toward subscription, data and digital real estate, and the company holds net cash, both of which keep lifting margins. Still, the consolidated company is a mature conglomerate, and its most valuable asset (REA) is only partly owned.
Revenue grew 6.9% last year and margin expanded to 12.6%, which confirms the 16% target path. I raised Y1 growth from 4% to 5% to reflect that momentum, but the 5-year CAGR of 4.1% argues against extrapolating further. Every other driver stays where it was, since nothing has changed the story: an ordinary 8-year horizon, the industry beta, and low failure risk given net cash.
Value drivers
| Revenue growth (Y1) | 5.0% |
| Terminal growth | 2.0% |
| Forecast horizon | 8y |
| Target operating margin | 16.0% |
| Years to target margin | 5 |
| Sales-to-capital | 0.86 |
| Beta | 1.10 |
| Failure probability | 2.0% |
| Cost of capital (WACC) | 9.6% |
| Terminal WACC | 9.2% |
Valuation bridge
| PV of explicit FCFF | 3.81B |
| PV of terminal value | 7.16B |
| Equity value | 10.15B |
| ÷ shares → per share | $18.82 |
News
neutral -0.10 · 8 articles
- What Are Dell Stock Investors Overlooking?
- Inside The War Between Real Estate’s Compass and Zillow
- News (NWSA) Launches A Geopolitical Risk Council, Is The 22% Upside Still There?
- 1 Profitable Stock to Target This Week and 2 Facing Headwinds
- Is News Corporation Stock Underperforming the S&P 500?
- Why Has Synopsys Stopped Leading With Bad News?
- 3 Cash-Heavy Stocks with Warning Signs
- What's Happening With CRWV Stock?
Projected free cash flow to the firm
| Yr | Revenue | Growth | Margin | NOPAT | Reinvest | FCFF | PV |
|---|---|---|---|---|---|---|---|
| 1 | 9.48B | 5.0% | 13.3% | 896.87M | 524.88M | 371.99M | 339.33M |
| 2 | 9.91B | 4.6% | 14.0% | 985.05M | 503.89M | 481.17M | 400.38M |
| 3 | 10.32B | 4.1% | 14.7% | 1.08B | 477.52M | 597.48M | 453.51M |
| 4 | 10.71B | 3.7% | 15.3% | 1.17B | 445.86M | 720.03M | 498.55M |
| 5 | 11.06B | 3.3% | 16.0% | 1.26B | 409.07M | 847.77M | 535.46M |
| 6 | 11.37B | 2.9% | 16.0% | 1.29B | 367.40M | 925.35M | 533.14M |
| 7 | 11.65B | 2.4% | 16.0% | 1.32B | 321.21M | 1.00B | 527.11M |
| 8 | 11.88B | 2.0% | 16.0% | 1.35B | 270.95M | 1.08B | 517.62M |
Key risks
- Structural decline in print news and advertising in Australia and the UK
- A housing-cycle downturn hitting REA and Move listings revenue
- Conglomerate discount persists and Murdoch family control limits value unlocking
Catalysts
- Sale or spin-off of REA or Move that makes sum-of-parts value visible
- Continued Dow Jones B2B data growth and AI licensing deals lifting margins