Fox Corporation currently trades around $73 per share, reflecting a trailing P/E of 16.1 and solid profitability driven by cable networks and digital assets. With robust free cash flow generation and analyst expectations for modest EPS growth ahead, a blended valuation approach incorporating discounted cash flow and relative multiples suggests a fair value range of $72 to $78 per share, indicating the stock is fairly valued with limited immediate upside or downside potential.
Company Profile and Business Segments Fox Corporation operates as a diversified media and entertainment company, with core operations spanning cable programming, broadcast television, and digital platforms. Its portfolio includes high-margin news and business channels like Fox News Channel and Fox Business Network, sports assets through Fox Sports (including NFL, MLB, and soccer rights), entertainment properties, and the fast-growing Tubi streaming service. The company benefits from stable advertising and affiliate fee revenues, though it faces headwinds from cord-cutting trends in traditional cable and fluctuating political advertising cycles.
Key Financial Highlights Over the trailing twelve months, Fox reported revenue of $16.47 billion, EBITDA of $3.56 billion, and net income attributable to common shareholders of approximately $2.04 billion. Profit margins remain strong, with operating margins at 26.32% and net profit margins at 12.35%. Return on equity stands at 17.27%, supported by efficient capital management.
Levered free cash flow (FCF) came in at $2.11 billion, with operating cash flow at $3.04 billion. The balance sheet shows total cash of $4.37 billion and total debt of $7.45 billion, resulting in net debt of roughly $3.08 billion. Enterprise value sits at $33.29 billion, with an EV/EBITDA multiple of 9.41. Shares outstanding total approximately 444 million, contributing to a market capitalization near $32.3 billion.
Recent Performance Trends Revenue has shown resilience, with TTM figures reaching $16.3 billion compared to $13.98 billion in fiscal 2024 and $14.91 billion in 2023. Net income has trended upward, with TTM figures at $2.26 billion and diluted EPS at $4.91 in recent updates. EPS estimates for fiscal 2026 stand at $4.48, with growth projected at 13.08% into 2027. Near-term pressures include softer political ad spending post-election cycles, offset by strength in sports rights and Tubi user engagement.
Valuation Approach: Discounted Cash Flow Model A two-stage discounted cash flow (DCF) model is used to estimate intrinsic value, focusing on free cash flow to equity (FCFE) given the company’s capital structure.
Base levered FCF is taken at $2.11 billion. A conservative short-term growth rate of 7% is applied over five years, accounting for digital streaming expansion and sports asset contributions tempered by traditional cable declines. A perpetual growth rate of 2.5% is assumed thereafter, reflecting long-term economic growth and industry maturity.
The discount rate (cost of equity) is set at 8%, incorporating a beta of 0.50, a risk-free rate near 4%, and an equity risk premium of 5-6% adjusted for sector risks.
Projected FCFE and present values approximate as follows (in billions USD):
| Year | Projected FCFE | Discount Factor (8%) | Present Value |
|---|---|---|---|
| 1 | 2.26 | 0.926 | 2.09 |
| 2 | 2.42 | 0.857 | 2.07 |
| 3 | 2.59 | 0.794 | 2.06 |
| 4 | 2.77 | 0.735 | 2.04 |
| 5 | 2.96 | 0.681 | 2.02 |
| Terminal Value (Year 5) | ~52.0 (at 2.5% perp) | 0.681 | ~35.4 |
Sum of present values yields an estimated equity value of approximately $45-46 billion, translating to a per-share fair value of $102-$104 under these assumptions. However, adjusting for higher near-term uncertainty (e.g., cable revenue risks) and a slightly elevated discount rate to 9% brings the range closer to $75-$85, aligning with more conservative industry models.
Valuation Approach: Relative Multiples Analysis Comparable multiples provide a market-based perspective. Fox trades at a trailing P/E of 16.1 and forward P/E of 16.2, with an EV/EBITDA of 9.41. Media sector peers often range from 10x-12x EV/EBITDA, reflecting varying exposure to growth assets.
Applying a fair EV/EBITDA multiple of 10.5x to current EBITDA of $3.56 billion produces an enterprise value of $37.4 billion. Subtracting net debt of $3.08 billion yields an equity value of $34.3 billion, or approximately $77 per share.
On a P/E basis, a fair multiple of 16.5x-17x applied to forward EPS of $4.48 suggests $74-$76 per share. The current price near $73 aligns closely with these levels, particularly when factoring in the 1-year analyst consensus target of $73.22.
Risks and Considerations Key risks include ongoing cord-cutting, competition in streaming from larger platforms, and variability in advertising tied to political and sports events. Strengths lie in high-margin news content, long-term sports contracts, and Tubi’s low-cost growth trajectory. Upcoming quarterly earnings on February 4, 2026, could provide further clarity on revenue trends.
Disclaimer This article is for informational purposes only and does not constitute investment advice, a recommendation to buy or sell securities, or a solicitation of any kind. Market conditions change rapidly, and investors should conduct their own due diligence and consult professional advisors before making decisions.