The New York Times (NYT)

Newspaper and digital media company The New York Times (NYSE:NYT) met Wall Street’s revenue expectations in Q1 CY2025, with sales up 7.1% year on year to $635.9 million. Its non-GAAP profit of $0.41 per share was 19.9% 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 experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, The New York Times’s sales grew at a sluggish 7.7% compounded annual growth rate over the last five years. This was below our standard for the consumer discretionary sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. The New York Times’s recent performance shows its demand has slowed as its annualized revenue growth of 6.2% over the last two years was below its five-year trend.

We can better understand the company’s revenue dynamics by analyzing its number of subscribers, which reached 11.06 million in the latest quarter. Over the last two years, The New York Times’s subscribers averaged 8.4% 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 grew its revenue by 7.1% year on year, and its $635.9 million of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 5.7% 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 lead to better top-line performance yet.

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

The New York Times’s operating margin has risen over the last 12 months and averaged 12.9% over the last two years. Its profitability was higher than the broader consumer discretionary sector, showing it did a decent job managing its expenses.

This quarter, The New York Times generated an operating profit margin of 9.2%, up 1.1 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 7.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

In Q1, The New York Times reported EPS at $0.41, up from $0.31 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 $2.11 to grow 1.8%.

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 impressive cash profitability, giving it the option to reinvest or return capital to investors. The company’s free cash flow margin averaged 15% over the last two years, better than the broader consumer discretionary sector.

The New York Times’s free cash flow clocked in at $89.85 million in Q1, equivalent to a 14.1% margin. This result was good as its margin was 6.3 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 16.3%, 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. Unfortunately, The New York Times’s ROIC averaged 2.6 percentage point decreases 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.

Businesses that maintain a cash surplus face reduced bankruptcy risk.

The New York Times is a profitable, well-capitalized company with $902.3 million of cash and $350 million of debt on its balance sheet. This $552.3 million net cash position is 6.4% 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.

We enjoyed seeing The New York Times beat analysts’ EPS expectations this quarter despite in line revenue. Looking ahead, the company slightly raised full-year guidance for total subscription revenue growth and advertising revenue growth. Overall, this print had some key positives. The stock remained flat at $52.75 immediately following the results.

Updated: July 10, 2025 at 10:24 PM EDT

We think that the latest earnings result is only one piece of the bigger puzzle. If you’re deciding whether to own The New York Times, you should also grasp the company’s longer-term business quality and valuation.

The New York Times’s business quality ultimately falls short of our standards. To kick things off, its revenue growth was uninspiring over the last five years, and analysts don’t see anything changing over the next 12 months. And while its remarkable EPS growth over the last five years shows its profits are trickling down to shareholders, the downside is its projected EPS for the next year is lacking. On top of that, its number of subscribers has disappointed.

The New York Times’s P/E ratio based on the next 12 months is 26.2x. At this valuation, there’s a lot of good news priced in - you can find more timely opportunities elsewhere.

Wall Street analysts have a consensus one-year price target of $57.88 on the company (compared to the current share price of $56.38).