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Here's Why NY Times (NYT) Marching Ahead of the Industry

Zacks Equity Research

The U.S. newspaper publishing industry has been grappling with declining print readership and advertising revenues for quite some time now. Nevertheless, the industry participants are evolving from being just pure news-content providers and advertisement platforms. They are also resorting to data analytics and modeling to not only engage the audience but also provide targeted marketing services on behalf of local businesses.

In this regard, The New York Times Company NYT has done a commendable job. The company has been keeping pace with the changing times by utilizing technological advancements to reach their target audience more effectively. This dramatic shift to digitization also demands simplification of the operating structure and lowering dependency on traditional advertising.

Notably, the company’s concerted efforts in these directions have led the shares of this news and information provider to march ahead of the industry. In the past three months, this Zacks Rank #2 (Buy) stock has gained 12.3% compared with the industry’s rally of 10.4%.



 

Let’s Take an Insight

Rapid digitization in the core areas of advertising, subscriptions and sales, printing, and distribution services has turned out to be a major source of revenues. The company has been diversifying business, adding new revenue streams, realigning cost structure and streamlining operations to increase efficiencies. The company has been gearing up to become not only an optimum destination for news and information but is also focusing on service journalism, with verticals like Cooking, Watching and Well.

Certainly, changing consumer preferences and innovative technologies have altered the way in which news is offered and consumed. Readers’ preference for accessing news online, mostly free, has made the industry’s print-advertising model increasingly redundant.

As readers started thronging the Internet for news, advertisers followed suit, and so did the newspaper companies. Trimmed print operations paved the way for online publications that led to the development of a pay-and-read model, as adopted by The New York Times Company in 2011.

Last year, the company added more than 1 million net digital subscriptions, the highest annual run-rate since the launch of the digital model. The company now has more than 5 million total subscriptions, comprising 3.4 million core news subscriptions, more than 300,000 to NYT Cooking and 600,000 to NYT Crossword, as well as nearly 900,000 print subscriptions.

Bottom Line

We believe that the company’s persistent endeavors to rapidly acclimatize to the changing face of the multiplatform media universe will help the stock to retain momentum. Remarkably, the company attained its set target of doubling digital revenues a year ahead of schedule. The company passed its goal of $800 million of annual digital revenues in 2019. We note that the company’s digital revenues were around $400 million in 2015.

3 Stocks That Deserve Your Attention

TEGNA Inc. TGNA, which sports a Zacks Rank #1 (Strong Buy), has a long-term earnings growth rate of 10%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The E.W. Scripps Company SSP, which carries a Zacks Rank #1, reported a positive earnings surprise in the last reported quarter.

Grupo Televisa TV has a long-term earnings growth rate of 15.1%. The stock carries a Zacks Rank #2.

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Grupo Televisa S.A. (TV) : Free Stock Analysis Report
 
TEGNA Inc. (TGNA) : Free Stock Analysis Report
 
The New York Times Company (NYT) : Free Stock Analysis Report
 
E.W. Scripps Company (The) (SSP) : Free Stock Analysis Report
 
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