Investment Thesis
NYT demonstrates solid fundamental strength with 9.2% revenue growth and robust free cash flow generation ($81.5M), supported by a conservative balance sheet (0.12x debt/equity). However, flat net income growth despite revenue expansion indicates margin pressure that requires monitoring, and low capital returns (ROE 4.4%, ROA 3.1%) suggest the business operates in a challenged environment with limited growth leverage.
Strengths
- Strong revenue growth of 9.2% YoY in mature publishing sector demonstrates competitive positioning
- Excellent free cash flow generation at $81.5M (11.4% FCF margin) provides real cash for returns and flexibility
- Very conservative capital structure with 0.12x debt/equity ratio and $186.7M cash ensures financial stability
- Solid operating margins at 12.7% and decent liquidity (1.60x current ratio) indicate operational control
- EPS growing 18.1% YoY driven by improved capital efficiency despite flat net income
Risks
- Net income flat (+0.0%) despite 9.2% revenue growth signals persistent margin compression or cost pressures
- Publishing industry faces secular headwinds from print decline and digital disruption requiring continuous adaptation
- Very thin gross margins (11.7%) indicate limited pricing power and vulnerability to cost inflation
- Low returns on capital (ROE 4.4%, ROA 3.1%) suggest capital deployment inefficiency despite strong FCF
- Moderate insider trading activity (38 Form 4 filings in 90 days) could indicate management uncertainty
Key Metrics to Watch
- Net income growth trajectory - critical to understand if margin pressure is temporary or structural
- Digital subscription growth rates and recurring revenue mix - key to long-term growth sustainability
- Free cash flow consistency and conversion rate - verify if 11.4% FCF margin is sustainable
- Operating margin trends - monitor for evidence of cost management or further compression
- Debt levels and leverage ratios - ensure conservative positioning is maintained for financial flexibility
Financial Metrics
Revenue
712.2M
Net Income
87.9M
EPS (Diluted)
$0.54
Free Cash Flow
81.5M
Total Assets
2.9B
Cash
186.7M
Profitability Ratios
Gross Margin
11.7%
Operating Margin
12.7%
Net Margin
12.3%
ROE
4.4%
ROA
3.1%
FCF Margin
11.4%
Balance Sheet & Liquidity
Current Ratio
1.60x
Quick Ratio
1.59x
Debt/Equity
0.12x
Debt/Assets
0.0%
Interest Coverage
N/A
Long-term Debt
246.0M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-08T11:41:12.701486 |
Data as of: 2026-03-31 |
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