Fox Corp Class B (FOX)

Conclusion

Fox Corporation Class B (FOX.US) operates news, sports and entertainment businesses, with a cable network segment and a television segment that includes the FOX broadcast network, the Tubi streaming service and its broadcast stations. At a price of 60.51 USD on 2026-11-09, the market capitalisation is 13.33 billion USD.

The verdict is undervalued. The shares trade on a P/E of 6.6x, an EV/EBITDA of 3.8x and a P/FCF of 6.0x. The ten-year medians for these multiples are not available, so they cannot be set against the company's own history. The DCF gives 191.39 USD per share at a discount rate of 8.9%, and the fair value band runs from 153.12 to 229.67 USD with a midpoint of 191.39 USD, a margin of safety of 216.3% at the current price. The reverse DCF implies growth of -9.9% a year, while revenue grew at 5.8% a year over five years and free cash flow per share fell at 1.3% a year over the same period.

Three numbers hold the case up: a return on invested capital of 18.8% against a WACC of 7.0%, a trailing free cash flow conversion of 108.7%, and net debt to EBITDA of 0.71x. Three numbers could break it: EPS grew only 1.5% a year over five years, the net margin of 11.3% sits below its median of 12.3%, and the Altman Z-score of 2.76 falls in the grey zone.

Financial health

Financial strength is green, supported by a current ratio of 3.79, a quick ratio of 3.37, net debt to EBITDA of 0.71x and interest coverage of 10.4x. Debt to equity stands at 0.61. The Altman Z-score is 2.76, in the grey zone. The Altman model was designed for manufacturers, and Fox is a media company, so this reading is only indicative. Insolvency risk is low, at about 0.2% by the estimate of the Ohlson model over one to two years. The five-year measure of debt against revenue growth is -8.0%. Debt maturity schedule is not available, so the timing of repayments cannot be judged from this data.

Earnings quality

Earnings quality is green. Free cash flow conversion is 108.7% on a trailing basis and 113.7% over five years, and the accrual ratio is -1.25%, which points to cash earnings rather than accounting accruals. Stock-based compensation is 0.78% of revenue, and free cash flow after it is 2.07 billion USD. The share count fell at a five-year compound rate of 6.2%, which indicates buybacks. The Piotroski score is 7 out of 9 and the Beneish M-score is -2.21, a reading the model rates as unlikely to signal manipulation. Fox beat analyst estimates in all 8 of the last quarters, with an average surprise of 33.7%. Current-year estimates rose 10.2% over 90 days, with no revisions in the last 30 days, and next-year EPS growth is estimated at 14.6%.

Profitability

Profitability is green. The gross margin is 34.1% against a median of 35.8%, the operating margin is 23.0% against a median of 22.5%, and the net margin is 11.3% against a median of 12.3%. Operating margin stability is 8.2%. The most important figure is return on invested capital of 18.8% against a WACC of 7.0%, and the given spread between them is 11.7%, which the model labels as value-creating. The five-year median return on invested capital is 14.2%. Return on equity is 16.3%. The DuPont split shows a net margin of 9.8%, an asset turnover of 0.76 and an equity multiplier of 1.93, so part of the equity return comes from leverage rather than from operations alone.

Growth

Growth is green, though the growth rates themselves are moderate. Revenue compounded at 4.7% over three years, 5.8% over five years and 6.8% over ten years. Earnings per share compounded at 18.7% over three years but only 1.5% over five years and 8.5% over ten years, so the recent three-year figure reflects a rebound rather than a steady trend. Free cash flow per share compounded at 7.7% over three years, fell 1.3% a year over five years and grew 7.8% over ten years. Revenue grew in 9 of the last 10 comparable years.

Valuation

Valuation is green. The current P/E is 6.6x, EV/EBITDA is 3.8x, P/FCF is 6.0x, price to sales is 0.74x and price to book is 1.07x. The FCF yield is 16.6% and the earnings yield is 15.2%. The ten-year medians for these multiples are not available, so no premium or discount to history can be stated. The DCF gives 191.39 USD per share, using a discount rate of 8.9%, a first-stage growth rate of 6.8% and a terminal growth rate of 2.5%. The reverse DCF implies growth of -9.9%, against revenue growth of 5.8% and free cash flow per share growth of -1.3% over five years. The fair value band is an estimate built on fixed assumptions, including a 5% equity risk premium and capped growth. It is not a price target. The dividend yield is 2.1%, the forward yield is 0.97%, and the payout is 12.7% of free cash flow.

Risks

The main risk is that the cash flows the valuation depends on do not hold. The DCF rests mostly on the terminal value, which accounts for 57.1% of the result, so small changes in the discount rate or terminal growth move the answer a long way. Five-year EPS growth of 1.5% and a five-year fall in free cash flow per share mean the historical record does not yet support the optimism in the DCF. A net margin below its median would reduce the cash available to service debt and fund buybacks. A weaker Altman reading would matter more if the grey-zone result reflected real stress rather than a sector effect. Some values are not available: the ten-year medians for valuation multiples, a debt maturity schedule and revenue by segment. This analysis does not cover them, so it cannot show how the cable and broadcast businesses each contribute to the outcome.