Company Overview
Fox Corporation operates as a significant news, sports, and entertainment company within the United States, utilizing four distinct segments: Cable Network Programming, Television, Credible, and The FOX Studio Lot to produce and license content. The company is situated in the Communication Services sector, specifically within the Entertainment industry, where it focuses on the creation and distribution of media assets rather than direct consumer retail. This entity employs a workforce of 10,400 individuals to support its extensive operations across these diverse segments. With a market capitalization of $25.15B and annual revenue of $16.58B, Fox Corporation represents a substantial mid-to-large-cap player in the media landscape. These valuation and revenue figures indicate that the company holds a considerable position in the entertainment market, possessing the scale necessary to invest in high-quality programming and maintain distribution relationships with major cable and streaming partners.
Financial Health
The company reported revenue of $16.58B over the trailing twelve months, generating net income of $1.89B and an EBITDA of $3.53B during the same period. The substantial gap between the $16.58B in revenue and the $1.89B in net income reveals a cost structure where operating expenses, including content production and distribution costs, consume approximately 88.6% of total revenue before interest and taxes. Free cash flow stands at $1.77B, which indicates a strong capacity to generate cash from operations after capital expenditures, providing significant financial flexibility for debt repayment or strategic investments. The gross margin of 35.4% reflects the pricing power and cost efficiency inherent in the entertainment industry, while the operating margin of 11.3% and profit margin of 11.4% demonstrate that the company effectively manages overhead to convert revenue into bottom-line profit. On the balance sheet, the company holds $2.02B in cash against $7.50B in debt, resulting in a debt-to-equity ratio of 67.39%, which suggests a leveraged capital structure typical for capital-intensive media firms. The current ratio of 2.78 indicates that current assets are nearly three times the value of current liabilities, signaling robust short-term liquidity and the ability to meet immediate obligations without distress. Return on Equity is calculated at 16.8%, while Return on Assets sits at 8.8%, metrics that reveal management is generating substantial returns on shareholder capital relative to the total asset base employed.
Valuation Assessment
The trailing twelve-month P/E ratio is 14.18, while the forward P/E ratio is projected at 11.46, implying that the market expects earnings growth in the coming year that would justify a lower multiple on future profits. The price-to-book ratio of 2.30 indicates that the market values the company at more than double its book value, suggesting a premium placed on its intangible assets like intellectual property and brand equity. Alternative valuation metrics such as the price-to-sales ratio of 1.52 and the EV/EBITDA of 8.72 provide additional context, showing the company trades at a premium relative to sales but at a reasonable multiple of earnings before interest, taxes, depreciation, and amortization. The stock's 52-week trading range spans from a low of $46.42 to a high of $76.39, and without a specific current price listed in the facts, the valuation is best understood by these established boundaries which define the recent volatility and market sentiment. The beta of 0.54 indicates that the stock is significantly less volatile than the broader market, moving with roughly half the magnitude of market swings, which offers a distinct risk profile compared to high-beta technology or financial stocks.
Growth & Income
Revenue growth for the trailing twelve months stands at 2.0%, whereas earnings growth is reported at -35.8%, indicating that earnings are currently growing much slower than revenue due to the negative earnings growth rate. This divergence implies that while top-line sales are stabilizing, cost pressures or one-time charges have materially impacted profitability in the recent period. As a dividend payer, the company offers a yield of 0.9% with a payout ratio of 13.2%, a figure that is highly sustainable given that the payout represents only a small fraction of the generated earnings. The low payout ratio allows the company to retain the majority of profits for reinvestment rather than distributing them entirely to shareholders. Overall, the growth and income profile presents a scenario of stable revenue expansion with a modest, sustainable dividend yield that currently accommodates significant earnings volatility.