FOX CORP - CLASS A (NASDAQ:FOXA) – A Potential Undervalued Opportunity in Media

FOX CORP - CLASS A (NASDAQ:FOXA) was identified by our Decent Value stock screener as a company with solid fundamentals and an attractive valuation. The media giant stands out with strong profitability and financial health, while trading at a discount compared to industry peers. Below, we examine why FOXA may appeal to value investors.

Valuation

FOXA’s valuation metrics suggest the stock is priced conservatively:

• P/E Ratio: At 12.76, FOXA trades below both the industry average (52.99) and the S&P 500 (27.45).
• Forward P/E: 13.00, also lower than the sector (30.42) and broader market (21.90).
• Price/Free Cash Flow: More than 78% of media industry peers are more expensive on this metric.
• PEG Ratio: A low PEG indicates earnings growth is not fully reflected in the stock price.

Financial Health

The company maintains a strong balance sheet:

• Current Ratio: 2.45, well above industry standards, indicating ample liquidity.
• Debt Management: A Debt/Equity ratio of 0.57 is manageable, and FOXA has reduced debt levels over the past year.
• Altman-Z Score: 2.91, signaling low near-term bankruptcy risk and outperforming 79% of peers.

Profitability

FOXA’s earnings power is a key strength:

• Return on Equity (ROE): 16.18%, ranking in the top 15% of media companies.
• Operating Margin: 19.03%, among the best in the industry.
• Consistent Earnings: Profitable for the last five years with stable cash flows.

Growth

While not a high-growth stock, FOXA shows steady expansion:

• Recent EPS Growth: Up 29.71% year-over-year.
• Revenue Growth: Increased 15.70% in the past year, with a 5-year CAGR of 4.18%.
• Future EPS Growth: Expected to grow at 10.42% annually, outpacing revenue projections.

For a deeper dive, review the full fundamental analysis of FOXA.

Our Decent Value screener lists more stocks with similar profiles and is updated regularly.

Disclaimer

This is not investment advice. The observations here are based on data available at the time of writing. Always conduct your own research before making investment decisions.