The New York Times Co. (NYT) Flourishes on Subscriber Growth
Despite operational challenges, The New York Times Company NYT has achieved success, propelled by growth in its subscriber base and a strategic transformation. The company's unwavering focus on diversifying revenue streams, optimizing costs and streamlining operations has been instrumental in its thriving performance. To bolster revenues further, The New York Times Company is actively promoting a more strategic bundled subscription offering.
This New York-based company has embraced technological advancements to forge strong connections with its target audience. The strategic acquisitions of Wirecutter, a product review website, and The Athletic, a digital subscription-based sports media business, have significantly widened its reach and unlocked new opportunities in the market. As The New York Times Company continues to adapt and innovate, its prospects remain promising in the dynamic media landscape.
Subscription Revenues Fuel Growth
The New York Times Company concluded the first quarter of 2023 with roughly 9.73 million paid subscribers across its print and digital products. Of the 9.73 million subscribers, approximately 9.02 million were paid digital-only subscribers. The company registered net growth of 190,000 digital-only subscribers in comparison to the preceding quarter and an impressive increase of 790,000 digital-only subscribers compared with the prior-year period.
Image Source: Zacks Investment Research
In the quarter under discussion, subscription revenues showcased growth of 6.9% year over year to $397.5 million. This can be attributed to an increase in the number of subscribers of the company’s digital-only offerings, the benefits of subscriptions graduating to higher-pricing tiers from initial promotional rates and increased revenues from The Athletic stand-alone subscriptions. We note that subscription revenues from digital-only products experienced a substantial increase of 14.1% to $258.8 million.
Management anticipates a 6-8% increase in subscription revenues for the second quarter of 2023, with a promising projection of a 12-15% increase in digital-only subscription revenues.
Wrapping Up
With rapid digitization in the core areas of advertising and readers increasingly gravitating toward online sources, newspaper companies have been reallocating resources to focus on online publications. The New York Times Company has demonstrated unwavering attempts to rapidly acclimatize to the changing face of the multiplatform media industry.
The company has been enhancing its reach through strategic buyouts and investments in games, sports and lifestyle. It has an ambitious vision to achieve 15 million subscribers by 2027.
Shares of this Zacks Rank #3 (Hold) company have advanced 12.9% in the past six months compared with the industry’s growth of 10.3%.
3 Stocks Worth Looking
Some better-ranked stocks are StoneCo Ltd. STNE, Meta Platforms META and Pearson plc PSO.
StoneCo, a leading provider of financial technology and software solutions, sports a Zacks Rank #1 (Strong Buy) and has an expected EPS growth rate of 55.2% for three to five years. The company has a trailing four-quarter earnings surprise of 11.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for StoneCo’s current financial-year sales and EPS suggests growth of 4.4% and 115.2%, respectively, from the year-ago period.
Meta Platforms, the world’s largest social media platform, carries a Zacks Rank #2 (Buy). META has a trailing four-quarter earnings surprise of 19%, on average.
The Zacks Consensus Estimate for Meta Platforms’ current financial-year revenues and EPS calls for growth of 13.2% and 30.3%, respectively, from the year-ago period. META has an expected EPS growth rate of 23.1% for three to five years.
Pearson, a global educational publishing and services company, currently carries a Zacks Rank #2. The expected EPS growth rate for three to five years is 10.5%.
The Zacks Consensus Estimate for Pearson’s current financial-year revenues and EPS implies growth of 1.2% and 14.1%, respectively, from the year-ago reported figure.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The New York Times Company (NYT) : Free Stock Analysis Report
Pearson, PLC (PSO) : Free Stock Analysis Report
StoneCo Ltd. (STNE) : Free Stock Analysis Report
Meta Platforms, Inc. (META) : Free Stock Analysis Report
