Fox Corp (NASDAQ: FOXA)

Sector: Communication Services Industry: Entertainment CIK: 0001754301
Market Cap 33.26 Bn
P/B 2.72
P/E 16.34
P/S 2.02
ROIC (Qtr) 11.89
Div Yield % 0.75
Rev 1y % (Qtr) 4.88
Total Debt (Qtr) 6.60 Bn
Debt/Equity (Qtr) 0.54

About

Fox Corporation, known as Fox Corp, is a prominent player in the news, sports, and entertainment industry, operating solely in the United States. The company was established in 2

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 3.04B provides robust 0.46x coverage of total debt 6.60B, indicating excellent debt servicing capability and financial flexibility.
  • Operating cash flow of 3.04B provides strong 23.53x coverage of stock compensation 129M, indicating sustainable incentive practices.
  • Operating cash flow of 3.04B provides exceptional 86.74x coverage of minority interest expenses 35M, showing strong core operations.
  • Operating cash flow of 3.04B provides exceptional 13.37x coverage of interest expenses 227M, showing strong debt service capability.
  • Robust free cash flow of 2.67B exceeds capital expenditure of 371M by 7.18x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 3.04B barely covers its investment activities of (714M), with a coverage ratio of -4.25, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 3.04B provides thin coverage of dividend payments of (284M) with a -10.69 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 4.37B provide limited coverage of acquisition spending of (97M), which is -45.03x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 2.81B relative to inventory of 509M (5.52 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 2.67B represents just -4.44x of debt issuance (600M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Entertainment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NFLX Netflix Inc 398.09 Bn 38.16 9.18 14.46 Bn
2 DIS Walt Disney Co 204.13 Bn 16.46 2.16 42.03 Bn
3 WBD Warner Bros. Discovery, Inc. 70.69 Bn 145.75 1.87 33.52 Bn
4 FWONA Liberty Media Corp 53.12 Bn -399.43 13.15 7.04 Bn
5 LYV Live Nation Entertainment, Inc. 33.40 Bn 103.67 1.36 9.39 Bn
6 FOXA Fox Corp 33.26 Bn 16.34 2.02 6.60 Bn
7 PSKY Paramount Skydance Corp 18.94 Bn -1,353.00 0.66 14.73 Bn
8 TKO TKO Group Holdings, Inc. 17.56 Bn 76.76 4.05 4.04 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.52 1.53
EV to Cash from Ops. EV/CFO 11.37 25.10
EV to Debt EV to Debt 5.23 5.03
EV to EBIT EV/EBIT 11.74 165.24
EV to EBITDA EV/EBITDA 10.40 -156.71
EV to Free Cash Flow [EV/FCF] EV/FCF 12.95 72.07
EV to Market Cap EV to Market Cap 1.04 2.12
EV to Revenue EV/Rev 2.09 6.42
Price to Book Value [P/B] P/B 2.72 2.40
Price to Earnings [P/E] P/E 16.34 -114.33
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 7.17 1.03
Dividend Payout Ratio % Div Payout % (Qtr) 12.20 -17.28
Dividend per Basic Share Div per Share (Qtr) 0.55 0.14
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 9.23 7.73
Interest Coverage Int. cover (Qtr) 12.95 -38.17
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -9.76 -33.75
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 7.80 248.04
Dividend Growth (1y) % Div 1y % (Qtr) 3.77 0.52
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 5.71 -100.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 12.74 -28.24
EBIT Growth (1y) % EBIT 1y % (Qtr) 3.85 -85.91
EBT Growth (1y) % EBT 1y % (Qtr) 4.07 24.10
EPS Growth (1y) % EPS 1y % (Qtr) 9.47 18.31
FCF Growth (1y) % FCF 1y % (Qtr) 60.64 118.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 15.67 30.85
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.72 0.60
Cash Payout Ratio Cash Payout (Qtr) 0.08 0.04
Cash Ratio Cash Ratio (Qtr) 1.77 0.45
Current Ratio Curr Ratio (Qtr) 3.24 1.09
Debt to Equity Ratio Debt/Equity (Qtr) 0.54 1.01
Interest Cover Ratio Int Coverage (Qtr) 12.95 -38.17
Times Interest Earned Times Interest Earned (Qtr) 12.95 -38.17
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 20.20 -65.26
EBIT Margin % EBIT Margin % (Qtr) 17.84 -79.53
EBT Margin % EBT Margin % (Qtr) 16.46 -82.47
Gross Margin % Gross Margin % (Qtr) 35.80 35.56
Net Profit Margin % Net Margin % (Qtr) 12.40 -83.18