The New York Times (NYT)

Newspaper and digital media company The New York Times (NYSE:NYT) announced better-than-expected revenue in Q3 CY2025, with sales up 9.5% year on year to $700.8 million. Its non-GAAP profit of $0.59 per share was 10.8% above analysts’ consensus estimates.

Company Overview

Founded in 1851, The New York Times (NYSE:NYT) is an American media organization known for its influential newspaper and expansive digital journalism platforms.

The advent of the internet changed how shows, films, music, and overall information flow. As a result, many media companies now face secular headwinds as attention shifts online. Some have made concerted efforts to adapt by introducing digital subscriptions, podcasts, and streaming platforms. Time will tell if their strategies succeed and which companies will emerge as the long-term winners.

Competitors in the news publishing and digital media sector include Gannett (NYSE:GCI), News (NASDAQ:NWSA), and E.W. Scripps (NASDAQ:SSP).

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, The New York Times grew its sales at a tepid 9.1% compounded annual growth rate. This was below our standard for the consumer discretionary sector and is a rough starting point for our analysis.

Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. The New York Times’s recent performance shows its demand has slowed as its annualized revenue growth of 6.6% over the last two years was below its five-year trend.

The New York Times also discloses its number of subscribers, which reached 11.76 million in the latest quarter. Over the last two years, The New York Times’s subscribers averaged 9.1% year-on-year growth. Because this number is higher than its revenue growth during the same period, we can see the company’s monetization has fallen.

This quarter, The New York Times reported year-on-year revenue growth of 9.5%, and its $700.8 million of revenue exceeded Wall Street’s estimates by 1.2%.

Looking ahead, sell-side analysts expect revenue to grow 5.9% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and implies its newer products and services will not catalyze better top-line performance yet.

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

The New York Times’s operating margin has risen over the last 12 months and averaged 14.2% over the last two years. Its solid profitability for a consumer discretionary business shows it’s an efficient company that manages its expenses effectively.

This quarter, The New York Times generated an operating margin profit margin of 15%, up 3 percentage points year on year. This increase was a welcome development and shows it was more efficient.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

The New York Times’s EPS grew at a remarkable 18.9% compounded annual growth rate over the last five years, higher than its 9.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

In Q3, The New York Times reported adjusted EPS of $0.59, up from $0.45 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects The New York Times’s full-year EPS of $2.38 to grow 3.3%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

The New York Times has shown robust cash profitability, giving it an edge over its competitors and the ability to reinvest or return capital to investors. The company’s free cash flow margin averaged 16.8% over the last two years, quite impressive for a consumer discretionary business.

The New York Times’s free cash flow clocked in at $182.1 million in Q3, equivalent to a 26% margin. This result was good as its margin was 7.5 percentage points higher than in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, causing temporary swings. Long-term trends carry greater meaning.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

The New York Times’s management team makes decent investment decisions and generates value for shareholders. Its five-year average ROIC was 16.9%, slightly better than typical consumer discretionary business.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. On average, The New York Times’s ROIC decreased by 1.1 percentage points annually over the last few years. We like what management has done in the past, but its declining returns are perhaps a symptom of fewer profitable growth opportunities.

One of the best ways to mitigate bankruptcy risk is to hold more cash than debt.

The New York Times is a profitable, well-capitalized company with $1.1 billion of cash and $400 million of debt on its balance sheet. This $700 million net cash position is 7.4% of its market cap and gives it the freedom to borrow money, return capital to shareholders, or invest in growth initiatives. Leverage is not an issue here.

It was good to see The New York Times beat analysts’ EPS expectations this quarter. We were also happy its revenue narrowly outperformed Wall Street’s estimates. On the other hand, its number of subscribers missed. Overall, this print had some key positives. The stock traded up 2.2% to $59 immediately after reporting.

Updated: December 3, 2025 at 9:31 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in The New York Times.

The New York Times doesn’t pass our quality test. For starters, its revenue growth was weak over the last five years, and analysts expect its demand to deteriorate over the next 12 months. On top of that, The New York Times’s number of subscribers has disappointed, and its projected EPS for the next year is lacking.

The New York Times’s P/E ratio based on the next 12 months is 24.9x. This multiple tells us a lot of good news is priced in - we think there are better opportunities elsewhere.

Wall Street analysts have a consensus one-year price target of $65 on the company (compared to the current share price of $64.21).