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Should You Invest in NYT Stock After a 25% Rise in Six Months?

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The New York Times Company (NYT - Free Report) has demonstrated impressive performance over the past six months, fueled by significant expansions in its subscriber base and a strategic emphasis on digital media. This evolution underscores NYT's emergence as a pivotal player in the dynamic media landscape.

During this period, NYT stock has rallied by 25.4%, surpassing industry benchmarks, which grew by 24.4%, and outperforming the S&P 500's 8.8% growth. As of yesterday's closing, the stock stood at $53.95, nearing its 52-week peak of $56.49, reached on Aug. 7, 2024.

Technical indicators are supportive of The New York Times Company's strong performance. The stock is trading above both its 50-day and 200-day moving averages, indicating robust upward momentum and price stability. This technical strength reflects positive market perception and confidence in NYT's financial health and prospects.

The company has successfully pivoted from a traditional print newspaper to a leading digital media entity. This strategic shift, bolstered by a commitment to high-quality journalism and a robust subscription model, has been pivotal in driving growth and engagement.

 

Zacks Investment Research
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Growth Engine Behind NYT Stock’s Momentum

The continuous growth of The New York Times Company's subscriber base remains a key driver of its success. As the subscriber count increases, so does the company’s market influence, making it an attractive platform for advertisers seeking to engage a broader, more invested audience.

At the close of the second quarter of 2024, The New York Times Company had approximately 10.84 million subscribers across its print and digital offerings. Of this total, 10.21 million were digital-only subscribers, including around 4.83 million bundle and multiproduct subscribers. Compared to the preceding quarter, the company added 300,000 net new digital-only subscribers, underscoring its steady growth trajectory.

Subscription revenues of $439.3 million grew 7.3% year over year. Subscription revenues from digital-only products jumped 12.9% to $304.5 million. This reflects an increase in bundle and multiproduct revenues and a rise in other single-product subscription revenues.

The company has also seen consistent improvement in its digital-only average revenue per user (ARPU), which rose to $9.34 in the second quarter compared to $9.15 in the same period last year. This growth in ARPU is largely driven by subscribers transitioning from promotional pricing to regular rates, along with price increases for long-term, non-bundle subscribers.

The New York Times expects further gains in subscription revenues in the third quarter of 2024. Management projects overall subscription revenues to grow by 7-9%, with digital-only subscription revenues forecasted to increase by 12-15%, signaling continued momentum in its digital business.

Is it too Late to Invest in NYT?

The New York Times Company’s robust stock performance, supported by positive technical indicators, reflects market confidence in its ongoing growth and innovation. As NYT continues to leverage digital opportunities and enhance subscriber engagement, it stands poised to maintain its leadership in the media industry, making it an attractive prospect for investors. Over the past 30 days, the Zacks Consensus Estimate for earnings for the current and next fiscal has increased by 6.1% and 5.1% to $1.90 and $2.07 per share, respectively. Currently, The New York Times Company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Worth Looking

Here, we have highlighted three other top-ranked stocks, namely Aspen Technology (AZPN - Free Report) , PayPal Holdings (PYPL - Free Report) and Datadog (DDOG - Free Report) .

Aspen Technology, a global leader in industrial software, currently sports a Zacks Rank #1. AZPN has a trailing four-quarter average earnings surprise of 4.2%. 

The Zacks Consensus Estimate for Aspen Technology’s current financial-year sales and earnings suggests growth of 5.5% and 12.8%, respectively, from the year-ago reported numbers.

PayPal Holdings, a global digital payments platform, currently sports a Zacks Rank #1. PYPL has a trailing four-quarter average earnings surprise of 14%. 

The Zacks Consensus Estimate for PayPal Holdings’ current financial-year sales suggests growth of 7.3% from the year-ago reported numbers.

Datadog, the monitoring and security platform for cloud applications, currently carries a Zacks Rank #2 (Buy). DDOG has a trailing four-quarter average earnings surprise of 21.7%. 

The Zacks Consensus Estimate for Datadog’s current financial-year sales and earnings suggests growth of 23.4% and 23.5%, respectively, from the year-ago reported numbers.

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