NWS — News Corporation

The tape is bullish on fundamentals, mildly cautious on near-term price. The August 5, 2026 fiscal Q4 print beat on both lines - revenue $2.34B (+11% YoY, ~$90M above consensus), adjusted EPS $0.35 (roughly double last year and $0.12 above consensus), segment EBITDA +31% to $423M - and full-year free cash flow rose 42% to $811M (FMP's quarterly data implies even higher, ~$1.07B). Sell-side reset higher after the print: JPMorgan Overweight/$38, Morgan Stanley $35, Citi $38-39, with the consensus average clustering $35.50-$37.20 and 21 Buy vs. 9 Hold vs. 3 Sell ratings. The AI-licensing narrative (multi-year content/data deals with OpenAI and Meta) is the incremental multiple-expander. The only softness is price action: as of 2026-09-13 the stock was down 3.51% over the prior week and 3.85% below its 20-day SMA, which reads as profit-taking after a 22% six-month move rather than a fundamentals-driven de-rating - there was no negative company news in the brief.

Revenue growth is genuinely accelerating, and that is the cleanest signal in the data. FY2024 revenue was $8.25B, FY2025 $8.45B (+2.4%), and FY2026 $9.03B (+6.8%). The quarterly YoY cadence through FY2026 went +2.3% (Sep-25), +5.5% (Dec-25), +8.8% (Mar-26), +10.8% (Jun-26) - a steady, four-quarter acceleration led by REA Group (+21%), Realtor.com/Move (+13%), HarperCollins (+15%) and Dow Jones (+7%). Cash generation inflected even harder: quarterly FCF went from essentially zero in Sep-25 (-$1M) to $131M, $399M and $539M, so FY2026 FCF of ~$1.07B is up ~47% vs. FY2025's ~$727M. Yearly FCF is heavily back-half weighted and should not be annualized off the June quarter. The wrinkle: FMP's GAAP operating income declined YoY in all four FY2026 quarters ($224M vs. $327M, $403M vs. $482M, $219M vs. $294M, $183M vs. $312M), taking FY2026 to about $1.03B from FY2025's ~$1.42B, even as revenue rose 6.8% - that sits awkwardly beside the '+31% segment EBITDA' narrative and needs explaining at the November print. Net income and EPS still rose (FY2026 EPS $1.03 vs. $0.82; +26%) thanks to below-the-line items and taxes. One data caution: FMP's quarterly gross_profit line is internally inconsistent (Q4 FY26 shows $1.705B gross profit on $2.337B revenue, a 73% margin, versus 51% in Q1 FY26), so do not read quarter-to-quarter gross margin off this feed. Verdict: structural acceleration in revenue and cash flow, not a one-quarter blip - but with an unresolved margin/cost question underneath it.

Fair, shading to modestly cheap on earnings and modestly rich on sales. As of 2026-09-13 at $32.71: TTM P/E 31.8x on EPS of $1.03, but forward P/E of only ~24.8x on next-fiscal-year consensus EPS of $1.321. PEG is 1.24, P/B 2.14, P/S 1.98, EV/EBITDA 12.5x. Against its own five-year history the picture splits: the 5-year average P/E is 43.96, so 31.8x looks cheap on earnings - but that average is inflated by years of depressed earnings, so it flatters the comparison. The 5-year average P/S is 1.66, so 1.98x is genuinely rich on sales. The tiebreaker is the balance sheet and mix: ~$2.10B cash against $1.99B long-term debt (roughly net cash), debt/equity 0.342, current ratio 1.62, and roughly 61% of revenue recurring/digital. A 12.5x EV/EBITDA for a company that consolidates REA Group plus Dow Jones is not demanding. Call it fairly valued with a slight upward bias inside a sum-of-the-parts frame, not a bargain on consolidated earnings power.

The market is paying for the growth story but only at a PEG of ~1.24, not at a premium multiple. At $32.71 you are buying ~24.8x next-FY EPS of $1.321, which implies roughly 28% EPS growth off the $1.03 base; that is achievable but relies on continued high-margin mix shift (Dow Jones B2B/risk data, AI licensing) rather than the 7% consolidated revenue growth the top line is actually delivering. Read it this way: if AI content licensing and digital real estate keep compounding and the GAAP operating income decline reverses, 24.8x is undemanding and $35-37 is a reasonable 12-month outcome. If EPS growth normalizes to high-single digits - consistent with ~7% revenue growth and 11.4% operating margin - then 24.8x forward is full and the stock chops sideways. The key tell at the November 2026 print is not revenue, it is whether operating margin stops compressing; that is the line that decides whether this re-rates or de-rates.

Range-bound uptrend with a short-term pullback, as of 2026-09-13. RSI(14) was 42.67 - neutral-to-soft, nowhere near oversold (<30) or overbought (>70), so there is no capitulation signal to buy off. Price of $32.71 sat 3.85% below the 20-day SMA (~$34.02), 0.34% above the 50-day SMA (~$32.60), and 9.23% above the 200-day SMA (~$29.95). Returns: -3.51% 1-week, +0.09% 1-month, +11.79% 3-month, +22.23% 6-month - i.e., a strong medium-term trend digesting a sharp run. Entry implication: the ~$32.60 50-day SMA is the immediate line in the sand. Holding it with RSI drifting back over 50 sets up a retest of the $35.76 52-week high; losing it decisively with RSI under 40 opens a slide toward the 200-day near $29.95, which would also be where the risk/reward genuinely improves. Note that all these levels are frozen as of 2026-09-13 and will have moved by the time anyone reads this.

• US and Australian housing turnover: Realtor.com/Move and REA Group revenue is levered to transaction volumes and listing yields. High benchmark rates have suppressed US turnover; Realtor.com has offset this with share gains and premium agent pricing, but a renewed leg up in mortgage rates would hit the highest-multiple assets in the portfolio.
• AI content and data licensing economics: multi-year agreements with OpenAI and Meta plus ongoing platform talks create high-margin, incremental revenue - but terms are opaque, payment timing is lumpy, and the long-run risk is that AI search intermediates news traffic away rather than paying for it.
• Digital advertising cycle: Dow Jones digital circulation, risk/compliance data and advertising have stabilized and sequentially accelerated into late 2026; a broad ad-market wobble would dent the least durable slice of the revenue mix.
• Currency translation: REA Group is Australian-dollar denominated, so AUD/USD moves flow directly into reported revenue, EBITDA and the sum-of-the-parts value of News Corp's largest single asset.
• Secular print decline and legacy cost inflation: newsprint, print distribution and pension/legal costs continue to drag the News Media segment; consolidated ROIC of 5.7% is the visible symptom.

• Fiscal Q1 2027 earnings, typically early-to-mid November 2026 - the first quantitative test of whether the Q4 FY26 +10.8% revenue growth and +31% segment EBITDA carried into the new year, and whether the GAAP operating income decline (FY26 $1.03B vs. FY25 $1.42B) reverses.
• Additional AI licensing / data-sharing announcements - each new multi-year platform deal is incremental high-margin revenue and has been the direct trigger for recent analyst target hikes (JPM $38, Citi $38-39).
• Execution of the $1B share repurchase program, reconfirmed by management in September 2026 - roughly 5-6% of the $17.9B market cap, acting as a structural bid and an EPS tailwind.
• US housing turnover recovery if mortgage rates fall - direct upside to Realtor.com/Move listing volumes and premium product take-rate.
• Sum-of-the-parts catalysts: continued analyst focus on the value of the REA Group stake (majority-owned) and any portfolio simplification moves.

• The GAAP operating income trend contradicts the adjusted narrative: FMP shows operating income down YoY in all four FY26 quarters, falling to ~$1.03B from ~$1.42B even as revenue grew 6.8%. If that is structural cost inflation rather than one-off items, the earnings quality behind the 'beat' is weaker than headlines suggest.
• Genuinely mediocre consolidated returns: ROIC 5.7%, ROE 6.7%, net margin 6.3%. News Corp earns a below-cost-of-capital blended return, and the strong segments (REA, Dow Jones) mask structurally weak ones (news media, parts of Move).
• Cyclicality in digital real estate: Realtor.com and REA are the highest-multiple, highest-growth assets and both are levered to housing turnover - a rates-driven slowdown hits the core of the bull case first.
• AI licensing opacity: contracts may be front-loaded or one-time, and long-run AI disintermediation of news traffic is a real structural threat, not just a tail risk.
• Conglomerate discount: the market has persistently valued News Corp below a plausible sum of its parts, and nothing in this dataset shows that narrowing. 3 Sell ratings and 9 Holds out of 33 analysts reflect that skepticism.

A decent, improving business at a fair price - buy-worthy on weakness, not at $32.71 in a hurry. The bull case is real: accelerating revenue (+10.8% in the June 2026 quarter), free cash flow up ~47% year over year to roughly $1.07B, a near-net-cash balance sheet, a $1B buyback and an AI-licensing stream that costs almost nothing to serve. The bear case is equally real: 5.7% ROIC, 6.3% net margin, GAAP operating income down 27% in FY2026, and a 24.8x forward P/E that already discounts ~28% EPS growth off a $1.03 base. I would not chase here; the risk/reward is materially better toward the 200-day moving average (~$30), where the multiple compresses toward ~22-23x forward and the buyback does more work per dollar.

Blended forward P/E and EV/EBITDA as of 2026-09-13. Method one: 26x next-fiscal-year consensus EPS of $1.321 = $34.35, a multiple justified by ~7% revenue growth, ~28% expected EPS growth, a near-net-cash balance sheet and a PEG of 1.24 - but held below the 5-year average P/E of 43.96 given the low 5.7% ROIC. Method two: the given 12.5x EV/EBITDA on an implied TTM EBITDA of ~$1.43B, grown ~9% into next year to ~$1.56B, yields an enterprise value of ~$19.5B; netting $2.10B cash against $1.99B long-term debt and dividing by the ~547M implied shares gives ~$35.82. Averaging the two approaches gives $35.10, which sits below the sell-side cluster of $35.50-$37.20 and roughly 7% above the $32.71 price.