Fox (FOXA) just released its latest earnings, attracting attention with higher sales compared to a year ago, but experiencing a clear drop in net income and earnings per share. Investors are also watching a new Tubi deal with Audiochuck, which could strengthen Fox’s streaming presence.

After a stellar run earlier this year, Fox's share price has cooled recently, closing at $60.81. Despite the latest earnings dip, the stock still boasts a 24% year-to-date price return. Long-term investors have seen total shareholder returns rise more than 46% over the past twelve months. Momentum might be pausing, but Fox’s push into streaming with big-name podcast deals keeps the outlook interesting.

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With shares holding below recent highs and fundamentals sending mixed signals, the big question is whether Fox’s current valuation leaves room for upside or if the market is already factoring in the company’s future growth prospects.

Most Popular Narrative: 3.4% Undervalued

Fox’s most followed narrative sees fair value close to its latest share price, but points to a small gap investors may be overlooking. This outlook is underpinned by underlying shifts in broadcast, streaming, and content dynamics in the media sector.

The widespread shift away from traditional linear television toward streaming services, especially among younger audiences, poses a major risk to Fox's core broadcast and cable businesses. This leads to persistent declines in advertising revenue and a shrinking addressable market, which will likely have a negative impact on top-line growth and future earnings.

Curious what powers this fair value? The big reveal: bold assumptions on where revenue and margins go as TV viewership changes, plus an industry-level price-to-earnings expectation that could surprise most investors. Wondering which key forecasting twist makes all the difference here? Click to see the secret sauce underpinning this valuation vision.

Result: Fair Value of $62.97 (UNDERVALUED)

However, robust live sports demand or faster digital growth could counter the expected declines. This could potentially challenge this more cautious outlook on Fox’s future.

Build Your Own Fox Narrative

If you’re not convinced by this outlook or want to test your own ideas, try building your own Fox narrative in just a few minutes. Do it your way

A great starting point for your Fox research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.