With the rapid digitization of mainstream advertising fields and the growing inclination of readers towards the Internet, news organizations have diverted their resources to online publications. The New York Times Company The NYT has made constant efforts to adapt quickly to the changing world of multiplatform media.
This New York-based company has kept pace with developments by using advancements in technology to reach target audiences more effectively. Its business model, which places greater emphasis on subscription revenue, bodes well.
Subscription revenue is a key driver
The New York Times Company ended the second quarter of 2022 with approximately 9.17 million paid subscribers, with approximately 10.56 million paid subscriptions for its print and digital products. Of the 9.17 million subscribers, approximately 8.41 million were paid-digital-only subscribers, with approximately 9.81 million paid-digital-only subscriptions.
Net increases of 180,000 and 230,000 were recorded for digital-only subscribers and digital-only subscriptions, respectively, compared to the end of the first quarter of 2022.
There was a net increase of 1,200,000 digital-only subscribers and 1,480,000 digital-only subscriptions compared to the second quarter of 2021. This excludes approximately 1,029,000 subscribers and 1,161,000 subscriptions that were added as a result of the takeover of The Athletic in the first quarter of 2021. 2022.
Athletic saw a net increase of 50,000 standalone subscribers in the quarter. Additionally, at the end of the quarter, The New York Times Company began giving its Bundle subscribers access to The Athletic, which added approximately 420,000 subscribers to The Athletic. As a result, total subscriber growth with The Athletic was approximately 470,000 in the second quarter.
Image source: Zacks Investment Research
In the second quarter of 2022, subscription revenue increased 13.1% year-over-year to $383.6 million, primarily due to an increase in product-only subscribers the company’s digital platforms, subscription benefits moving to higher prices through promotional introductory pricing, and the inclusion of subscription revenue from The Athletic. Subscription revenue from digital-only products jumped 25.5% to $238.7 million.
Management expects total subscription revenue in the third quarter to increase approximately 11-13%, while digital-only subscription revenue is expected to increase approximately 21-25%. The New York Times Company’s three-to-five-year goal includes 15 million total subscribers by the end of 2027.
Management expects total third-quarter subscription revenue to grow 5-7% at The New York Times Group and expects The Athletic to contribute 5-7 percentage points to consolidated results.
The New York Times company, which carries a Zacks rank of No. 3 (Hold), has diversified its business, added revenue streams, realigned the cost structure and streamlined operations to increase efficiency. The company is not only preparing to become an optimal destination for news and information, but also focusing on lifestyle products and services.
Shares of The New York Times Company are up 4.8% over the past six months compared to industry growth of 10.9%.
3 key actions
Some higher ranked stocks include Reservoir Media, Inc. RSVR, World Wrestling Entertainment, Inc. WWE and Cadence Design Systems, Inc. Cdn.
Reservoir Media, a music publishing company, sports a Zacks #1 (Strong Buy) ranking. RSVR has a last four quarter earnings surprise of 14.3% on average. You can see the full list of today’s Zacks #1 Rank stocks here.
Zacks’ consensus estimate for Reservoir Media’s current-year revenue and EPS suggests growth of 10.6% and 40%, respectively, over the prior year period. RSVR has an expected EPS growth rate of 15% over three to five years.
World Wrestling Entertainment, an integrated media and entertainment company, sports a No. 1 Zacks rank. WWE has a last four quarter earnings surprise of 30.9% on average.
Zacks’ consensus estimate for World Wrestling Entertainment’s current-year revenue and EPS suggests growth of 18.6% and 17.5%, respectively, over the prior year period.
Cadence Design Systems, which provides software, hardware, services and reusable IC design blocks worldwide, boasts a Zacks #1 rating. CDNS has a four-quarter earnings surprise of 9.8% on average.
Zacks’ consensus estimate for Cadence Design Systems’ current-year revenue and EPS suggests growth of 17% and 24.9%, respectively, over the prior year period. CDNS forecasts an EPS growth rate of 17.7% over three to five years.
This Little-Known Semiconductor Stock Could Be Your Portfolio’s Inflation Hedge
Everyone uses semiconductors. But only a small number of people know what they are and what they do. If you use a smartphone, computer, microwave, digital camera, or refrigerator (and that’s just the tip of the iceberg), you need semiconductors. This is why their importance cannot be overstated and their disruption in the supply chain has such a global effect. But every cloud has a silver lining. The shockwaves on the international supply chain from the global pandemic have exposed a tremendous opportunity for investors. And today, Zacks’ top stock strategist reveals the single semiconductor stock with the most to gain in a new FREE report. It’s yours at no cost and no obligation.>>Yes, I want to help protect my portfolio during the recession
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
World Wrestling Entertainment, Inc. (WWE): Free Stock Analysis Report
Cadence Design Systems, Inc. (CDNS): Free Inventory Analysis Report
Reservoir Media, Inc. (RSVR): Free Stock Analysis Report
To read this article on Zacks.com, click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.