News Corp A (NWSA)

Conclusion

News Corp A is a media and information company. Its Dow Jones unit publishes The Wall Street Journal, Barron's and Dow Jones Newswires, its digital real estate services include realestate.com.au and Realtor.com, and its book publishing arm includes HarperCollins. At 26.57 USD on 2026-11-09, the market capitalisation is 9.54 billion USD.

The verdict is undervalued. The price-to-earnings ratio is 11.4 against a ten-year median of 36.2, the enterprise value to EBITDA is 7.8 against 9.6, and the price to free cash flow is 9.7 against 20.9. The discounted cash flow gives 34.31 USD per share at a discount rate of 9.95%, and the fair value from historical multiples is 33.80 USD. The fair value band runs from 27.24 to 40.87 USD with a midpoint of 34.06 USD, a margin of safety of 28.2% at the current price. The reverse DCF implies revenue growth of -2.3% a year, against a five-year revenue change of -0.7% a year and free cash flow per share growth of 0.4% a year actually delivered.

The strongest supports are the free cash flow conversion of 117.0% over the trailing twelve months, the Piotroski score of 7 out of 9, and the net debt to EBITDA of 0.79. The weakest numbers are the five-year revenue compound growth of -0.7%, the return on invested capital of 8.3% against a cost of capital of 8.8%, and the Altman Z-score of 1.86, which sits in the grey zone.

Financial health

Financial strength is green, held up by a net debt to EBITDA of 0.79, a current ratio of 1.62 and a quick ratio of 1.38, and a debt to equity of 0.34. Interest coverage is not available because the company does not report its interest expense. The Altman Z-score is 1.86, in the grey zone. The Altman model was designed for manufacturers, and News Corp is a media company, so the score is only indicative. Insolvency risk: low, about 0.2% by the estimate of the Ohlson model over one to two years, based on the 2026-06-30 statements. Debt has fallen 3.4% a year over five years, so leverage is shrinking rather than rising.

Earnings quality

Earnings quality is green. Free cash flow conversion is 117.0% on a trailing basis and 179.6% over five years. The accrual ratio is -4.3%, which means cash earnings are running ahead of reported earnings. Free cash flow after stock-based compensation is 980 million USD, but stock-based compensation itself is not available. The share count has fallen at a compound 1.2% a year over five years, which points to buybacks. The Piotroski score is 7 out of 9 and the Beneish M-score is -2.54, which is reported as unlikely to indicate manipulation. The company beat earnings expectations in all 8 of the last quarters, with an average surprise of 22.3%. Estimates for next year have risen 3.7% over 90 days, and the next-year earnings growth estimate is 14.6%.

Profitability

Profitability is yellow. The gross margin is 56.0% against a ten-year median of 50.0%, and the net margin is 9.1% against a median of 2.7%. The operating margin is 12.0% against a median of 12.5%, slightly below its own history. The return on invested capital is 8.3% against a weighted cost of capital of 8.8%, giving a return on invested capital minus cost of capital value of -0.5%, rated neutral. The five-year median return on invested capital is 6.7%. The cost of debt of 6.9% is assumed, not reported. Return on equity is 9.9%. The DuPont split shows a net margin of 6.4%, an asset turnover of 0.58 and an equity multiplier of 1.82, so leverage contributes to the return on equity.

Growth

Growth is yellow. Revenue compound growth is 4.1% over three years, -0.7% over five years and 0.9% over ten years. Earnings per share compound at 58.6% over three years, 13.0% over five years and 12.8% over ten years. Free cash flow per share compounds at 12.3% over three years but only 0.4% over five years. Revenue grew in 7 of the 10 comparable years. The recent revenue recovery is therefore recent rather than sustained.

Valuation

Valuation is green. Against their ten-year medians, the price-to-earnings ratio of 11.4 carries a discount of 68.6% (median 36.2, based on seven data points), the enterprise value to EBITDA of 7.8 a discount of 19.0% (median 9.6), the price to free cash flow of 9.7 a discount of 53.4% (median 20.9), and the price to book of 1.12 a discount of 21.4% (median 1.43). The discounted cash flow uses a discount rate of 9.95%, a near-term growth rate of 0.85% and a terminal growth rate of 2.5%, giving 34.31 USD per share. The fair value band is 27.24 to 40.87 USD, with a midpoint of 34.06 USD. These figures are an order of magnitude built on fixed assumptions, including a 5% equity risk premium and capped growth, not a price target. The dividend yield is 2.3% and the payout on free cash flow is 22.2%.

Risks

The main risks are the weak numbers. Revenue has shrunk at 0.7% a year over five years, so the current valuation relies on the margin recovery holding. Return on invested capital sits just below the cost of capital, so a fall in margins would push it further below. The Altman Z-score in the grey zone means the balance sheet offers less cushion than the low insolvency estimate suggests. Interest coverage and stock-based compensation are not available, so these cannot be checked. The cost of debt is assumed rather than reported. This analysis has no debt maturity schedule and no revenue split by segment, so refinancing risk and the contribution of each division cannot be assessed.