Intrinsic value of New York Times Company (The) - NYT

Previous Close

$28.17

  Intrinsic Value

$11.45

stock screener

  Rating & Target

str. sell

-59%

Previous close

$28.17

 
Intrinsic value

$11.45

 
Up/down potential

-59%

 
Rating

str. sell

We calculate the intrinsic value of NYT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 4.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.80
  3.92
  4.03
  4.13
  4.21
  4.29
  4.36
  4.43
  4.48
  4.54
  4.58
  4.62
  4.66
  4.69
  4.73
  4.75
  4.78
  4.80
  4.82
  4.84
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
Revenue, $m
  1,815
  1,887
  1,963
  2,044
  2,130
  2,221
  2,318
  2,421
  2,529
  2,644
  2,765
  2,893
  3,028
  3,170
  3,319
  3,477
  3,643
  3,818
  4,002
  4,196
  4,400
  4,614
  4,839
  5,076
  5,325
  5,586
  5,861
  6,150
  6,454
  6,773
Variable operating expenses, $m
  1,470
  1,527
  1,588
  1,653
  1,722
  1,795
  1,873
  1,955
  2,042
  2,134
  2,217
  2,320
  2,428
  2,542
  2,662
  2,789
  2,922
  3,062
  3,210
  3,365
  3,528
  3,700
  3,881
  4,071
  4,270
  4,480
  4,701
  4,933
  5,176
  5,432
Fixed operating expenses, $m
  149
  152
  156
  159
  163
  166
  170
  174
  178
  181
  185
  190
  194
  198
  202
  207
  211
  216
  221
  226
  231
  236
  241
  246
  252
  257
  263
  269
  274
  280
Total operating expenses, $m
  1,619
  1,679
  1,744
  1,812
  1,885
  1,961
  2,043
  2,129
  2,220
  2,315
  2,402
  2,510
  2,622
  2,740
  2,864
  2,996
  3,133
  3,278
  3,431
  3,591
  3,759
  3,936
  4,122
  4,317
  4,522
  4,737
  4,964
  5,202
  5,450
  5,712
Operating income, $m
  196
  207
  219
  231
  245
  259
  275
  292
  309
  328
  362
  383
  406
  430
  455
  482
  510
  540
  572
  605
  641
  678
  717
  759
  803
  849
  898
  949
  1,004
  1,061
EBITDA, $m
  266
  279
  293
  308
  324
  342
  360
  380
  401
  423
  447
  472
  499
  527
  557
  589
  622
  657
  695
  734
  776
  820
  866
  915
  967
  1,021
  1,078
  1,138
  1,202
  1,269
Interest expense (income), $m
  39
  17
  19
  22
  25
  27
  31
  34
  37
  41
  45
  49
  54
  58
  63
  68
  74
  80
  86
  92
  99
  106
  113
  121
  129
  138
  147
  156
  166
  177
  188
Earnings before tax, $m
  180
  188
  197
  207
  217
  229
  241
  254
  268
  283
  313
  329
  347
  366
  386
  408
  430
  454
  480
  506
  535
  565
  596
  630
  665
  702
  742
  783
  827
  873
Tax expense, $m
  48
  51
  53
  56
  59
  62
  65
  69
  72
  76
  84
  89
  94
  99
  104
  110
  116
  123
  130
  137
  144
  152
  161
  170
  180
  190
  200
  211
  223
  236
Net income, $m
  131
  137
  144
  151
  159
  167
  176
  185
  196
  206
  228
  241
  254
  267
  282
  298
  314
  332
  350
  370
  390
  412
  435
  460
  485
  513
  541
  572
  603
  637

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  2,080
  2,161
  2,248
  2,341
  2,439
  2,544
  2,655
  2,773
  2,897
  3,028
  3,167
  3,314
  3,468
  3,631
  3,802
  3,983
  4,173
  4,374
  4,585
  4,806
  5,040
  5,285
  5,543
  5,814
  6,099
  6,399
  6,714
  7,045
  7,393
  7,758
Adjusted assets (=assets-cash), $m
  2,080
  2,161
  2,248
  2,341
  2,439
  2,544
  2,655
  2,773
  2,897
  3,028
  3,167
  3,314
  3,468
  3,631
  3,802
  3,983
  4,173
  4,374
  4,585
  4,806
  5,040
  5,285
  5,543
  5,814
  6,099
  6,399
  6,714
  7,045
  7,393
  7,758
Revenue / Adjusted assets
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
  0.873
Average production assets, $m
  737
  766
  797
  830
  865
  902
  941
  983
  1,027
  1,073
  1,123
  1,174
  1,229
  1,287
  1,348
  1,412
  1,479
  1,550
  1,625
  1,704
  1,786
  1,873
  1,965
  2,061
  2,162
  2,268
  2,380
  2,497
  2,620
  2,750
Working capital, $m
  -143
  -149
  -155
  -161
  -168
  -175
  -183
  -191
  -200
  -209
  -218
  -229
  -239
  -250
  -262
  -275
  -288
  -302
  -316
  -331
  -348
  -364
  -382
  -401
  -421
  -441
  -463
  -486
  -510
  -535
Total debt, $m
  291
  330
  372
  416
  464
  514
  568
  624
  684
  747
  814
  884
  959
  1,037
  1,119
  1,206
  1,298
  1,394
  1,496
  1,602
  1,714
  1,833
  1,957
  2,087
  2,224
  2,368
  2,520
  2,679
  2,846
  3,022
Total liabilities, $m
  1,000
  1,039
  1,081
  1,126
  1,173
  1,224
  1,277
  1,334
  1,393
  1,457
  1,523
  1,594
  1,668
  1,746
  1,829
  1,916
  2,007
  2,104
  2,205
  2,312
  2,424
  2,542
  2,666
  2,797
  2,934
  3,078
  3,229
  3,389
  3,556
  3,732
Total equity, $m
  1,079
  1,122
  1,167
  1,215
  1,266
  1,320
  1,378
  1,439
  1,504
  1,572
  1,644
  1,720
  1,800
  1,884
  1,973
  2,067
  2,166
  2,270
  2,379
  2,494
  2,616
  2,743
  2,877
  3,018
  3,166
  3,321
  3,485
  3,656
  3,837
  4,027
Total liabilities and equity, $m
  2,079
  2,161
  2,248
  2,341
  2,439
  2,544
  2,655
  2,773
  2,897
  3,029
  3,167
  3,314
  3,468
  3,630
  3,802
  3,983
  4,173
  4,374
  4,584
  4,806
  5,040
  5,285
  5,543
  5,815
  6,100
  6,399
  6,714
  7,045
  7,393
  7,759
Debt-to-equity ratio
  0.270
  0.290
  0.320
  0.340
  0.370
  0.390
  0.410
  0.430
  0.450
  0.480
  0.500
  0.510
  0.530
  0.550
  0.570
  0.580
  0.600
  0.610
  0.630
  0.640
  0.660
  0.670
  0.680
  0.690
  0.700
  0.710
  0.720
  0.730
  0.740
  0.750
Adjusted equity ratio
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  131
  137
  144
  151
  159
  167
  176
  185
  196
  206
  228
  241
  254
  267
  282
  298
  314
  332
  350
  370
  390
  412
  435
  460
  485
  513
  541
  572
  603
  637
Depreciation, amort., depletion, $m
  70
  72
  74
  77
  80
  82
  85
  88
  92
  95
  85
  89
  93
  97
  102
  107
  112
  117
  123
  129
  135
  142
  149
  156
  164
  172
  180
  189
  199
  208
Funds from operations, $m
  201
  209
  218
  228
  238
  249
  261
  274
  287
  302
  313
  330
  347
  365
  384
  405
  426
  449
  473
  499
  526
  554
  584
  616
  649
  684
  722
  761
  802
  845
Change in working capital, $m
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
Cash from operations, $m
  206
  215
  224
  234
  245
  257
  269
  282
  296
  311
  323
  340
  357
  376
  396
  417
  439
  463
  488
  514
  542
  571
  602
  635
  669
  705
  743
  784
  826
  871
Maintenance CAPEX, $m
  -54
  -56
  -58
  -60
  -63
  -66
  -68
  -71
  -74
  -78
  -81
  -85
  -89
  -93
  -97
  -102
  -107
  -112
  -117
  -123
  -129
  -135
  -142
  -149
  -156
  -164
  -172
  -180
  -189
  -199
New CAPEX, $m
  -26
  -29
  -31
  -33
  -35
  -37
  -39
  -42
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -71
  -75
  -79
  -83
  -87
  -91
  -96
  -101
  -106
  -112
  -117
  -123
  -130
Cash from investing activities, $m
  -80
  -85
  -89
  -93
  -98
  -103
  -107
  -113
  -118
  -125
  -130
  -137
  -144
  -151
  -158
  -166
  -174
  -183
  -192
  -202
  -212
  -222
  -233
  -245
  -257
  -270
  -284
  -297
  -312
  -329
Free cash flow, $m
  126
  130
  135
  141
  147
  154
  161
  169
  177
  187
  192
  203
  214
  225
  238
  251
  265
  280
  296
  312
  330
  349
  369
  390
  412
  435
  460
  486
  514
  543
Issuance/(repayment) of debt, $m
  37
  39
  42
  45
  47
  50
  53
  57
  60
  63
  67
  70
  74
  78
  83
  87
  92
  96
  101
  107
  112
  118
  124
  130
  137
  144
  152
  159
  167
  176
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  37
  39
  42
  45
  47
  50
  53
  57
  60
  63
  67
  70
  74
  78
  83
  87
  92
  96
  101
  107
  112
  118
  124
  130
  137
  144
  152
  159
  167
  176
Total cash flow (excl. dividends), $m
  163
  169
  177
  186
  195
  204
  215
  226
  237
  250
  259
  273
  288
  304
  320
  338
  357
  376
  397
  419
  442
  467
  493
  520
  549
  579
  611
  645
  681
  718
Retained Cash Flow (-), $m
  -39
  -42
  -45
  -48
  -51
  -54
  -58
  -61
  -65
  -68
  -72
  -76
  -80
  -85
  -89
  -94
  -99
  -104
  -109
  -115
  -121
  -127
  -134
  -141
  -148
  -156
  -163
  -172
  -181
  -190
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  125
  127
  132
  137
  143
  150
  157
  165
  173
  182
  187
  197
  208
  219
  231
  244
  258
  272
  288
  304
  321
  339
  359
  379
  401
  424
  448
  473
  500
  529
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  119
  116
  115
  113
  111
  109
  106
  103
  99
  95
  89
  84
  79
  74
  68
  62
  56
  50
  44
  39
  33
  28
  24
  19
  16
  12
  10
  7
  5
  4
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

The New York Times Company is a media company focused on creating, collecting and distributing news and information. The Company's principal business consists of distributing content generated by its newsroom through its print, Web and mobile platforms. In addition, it distributes selected content on third-party platforms. The Company includes newspapers, print and digital products and investments. The Company's businesses include newspapers, such as The New York Times (The Times); Websites, including NYTimes.com; mobile applications, including The Times's news applications, as well as interest-specific applications, such as NYT Cooking, Crossword and others, and related businesses, such as The Times news services division, product review and recommendation Websites The Wirecutter and The Sweethome, digital archive distribution, NYT Live (its live events business) and other products and services under The Times brand.

FINANCIAL RATIOS  of  New York Times Company (The) (NYT)

Valuation Ratios
P/E Ratio 156.5
Price to Sales 2.9
Price to Book 5.4
Price to Tangible Book
Price to Cash Flow 48.3
Price to Free Cash Flow 70.9
Growth Rates
Sales Growth Rate -1.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 11.1%
Cap. Spend. - 3 Yr. Gr. Rate 12%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 29.1%
Total Debt to Equity 29.1%
Interest Coverage 2
Management Effectiveness
Return On Assets 2.7%
Ret/ On Assets - 3 Yr. Avg. 3.3%
Return On Total Capital 2.5%
Ret/ On T. Cap. - 3 Yr. Avg. 3.2%
Return On Equity 3.5%
Return On Equity - 3 Yr. Avg. 5.3%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 59.6%
Gross Margin - 3 Yr. Avg. 60%
EBITDA Margin 8.5%
EBITDA Margin - 3 Yr. Avg. 10.5%
Operating Margin 6.5%
Oper. Margin - 3 Yr. Avg. 6.9%
Pre-Tax Margin 2%
Pre-Tax Margin - 3 Yr. Avg. 3.3%
Net Profit Margin 1.9%
Net Profit Margin - 3 Yr. Avg. 2.6%
Effective Tax Rate 16.1%
Eff/ Tax Rate - 3 Yr. Avg. 13.7%
Payout Ratio 89.7%

NYT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NYT stock intrinsic value calculation we used $1749 million for the last fiscal year's total revenue generated by New York Times Company (The). The default revenue input number comes from 0001 income statement of New York Times Company (The). You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NYT stock valuation model: a) initial revenue growth rate of 3.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for NYT is calculated based on our internal credit rating of New York Times Company (The), is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of New York Times Company (The).
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NYT stock the variable cost ratio is equal to 81%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $146 million in the base year in the intrinsic value calculation for NYT stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.6% for New York Times Company (The).

Corporate tax rate of 27% is the nominal tax rate for New York Times Company (The). In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NYT stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NYT are equal to 40.6%.

Life of production assets of 13.2 years is the average useful life of capital assets used in New York Times Company (The) operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NYT is equal to -7.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1040.781 million for New York Times Company (The) - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 165.839 million for New York Times Company (The) is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of New York Times Company (The) at the current share price and the inputted number of shares is $4.7 billion.

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