What is News Corporation (NASDAQ:NWSA) stock doing?
News Corporation (NASDAQ:NWSA), may not be a large-cap stock, but it has seen significant price moves over the past few months on the NASDAQGS, hitting highs of $18.83 and falling to lows of $14.95. Certain movements in the stock price can give investors a better opportunity to get into the stock and potentially buy at a lower price. A question that needs to be answered is whether News’ current trading price of US$16.13 reflects the true value of the mid cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at News’ outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for the news
What is the news worth?
According to my multiple price model, which compares the company’s price-earnings ratio to the industry average, the stock price seems justified. I used the price/earnings ratio in this case because there is not enough visibility to predict its cash flow. The stock’s ratio of 14.97x is currently trading slightly above its industry peers’ ratio of 10.68x, which means that if you buy News today, you’ll pay a relatively reasonable price for it. . And if you think News should be trading within this range, then there really isn’t much room for the stock price to rise above the levels of other industry peers over the long term. Although there may be an opportunity to buy in the future. This is because News’ beta (a measure of stock price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s stock will likely fall more than the rest of the market, providing an excellent buying opportunity.
What kind of growth will News generate?
Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking to grow your portfolio. Buying a big company with solid prospects at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. Although in the case of News, it is expected to post negative earnings growth of -1.5%, which does not help bolster its investment thesis. It seems that the risk of future uncertainty is high, at least in the short term.
What this means for you
Are you a shareholder? Currently, the NWSA appears to be trading around industry price multiples, but given the uncertainty of negative returns going forward, this could be a good time to de-risk your portfolio. Is your current exposure to the stock beneficial for your overall portfolio? And is the opportunity cost of holding a stock with a negative outlook too high? Before deciding on the NWSA, check if its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on the NWSA for a while, now might not be the best time to buy, given that it’s trading around industry price multiples. This means that there is less benefit from erroneous prices. Additionally, the negative growth outlook increases the risk of owning the stock. However, there are also other important factors that we have not considered today that can help crystallize your view on the NWSA if the price fluctuates below the industry PE ratio.
If you want to learn more about News as a business, it’s important to be aware of the risks it faces. You would be interested to know that we have found 1 warning sign for news and you will want to know.
If you are no longer interested in the news, you can use our free platform to view our list of over 50 other stocks with high growth potential.
Valuation is complex, but we help make it simple.
Find out if New is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.
See the free analysis
Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.