The firm maintained its "hold" rating on the media company, but said it cut its price target based on concerns regarding the trajectory of the Times' digital subscription revenue growth.
Shares of the New York Times are up 0.31% to $12.93 at the start of trading today.
TheStreet Ratings team rates NEW YORK TIMES CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NEW YORK TIMES CO (NYT) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 12.5%. Since the same quarter one year prior, revenues slightly increased by 2.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.81, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. To add to this, NYT has a quick ratio of 1.64, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has significantly increased by 94.92% to -$4.44 million when compared to the same quarter last year. In addition, NEW YORK TIMES CO has also vastly surpassed the industry average cash flow growth rate of 2.76%.
- The gross profit margin for NEW YORK TIMES CO is rather high; currently it is at 59.28%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, NYT's net profit margin of 0.44% significantly trails the industry average.
- NEW YORK TIMES CO's earnings per share declined by 50.0% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, NEW YORK TIMES CO reported lower earnings of $0.36 versus $1.05 in the prior year. This year, the market expects an improvement in earnings ($0.42 versus $0.36).
- You can view the full analysis from the report here: NYT Ratings Report