Can The New York Times Company Repeat Its Success in 2020?
A couple years ago, few investors would have identified The New York Times (NYSE: NYT) as a potential growth stock, yet The Gray Lady has enjoyed a heady run lately. Shares of the newspaper and online content powerhouse surged 44% in 2019, and over the last three years, the stock has booked a cumulative total return of 148%. In this article, we'll look at the key factors that will affect shares in 2020. For reference, the company will next report quarterly earnings in early February.
The New York Times' digital-only subscription growth has figured as its main economic driver and stock price catalyst over the last few years. In the first three reported quarters of 2019, digital-only subscriptions grew 31% versus the comparable prior-year period, while revenue from these products rose by 15%. Although news product subscriptions accounted for most of this growth, the smaller category of non-news digital "subs" has experienced extremely rapid expansion. This category, consisting primarily of stand-alone subscriptions to the Times' highly regarded cooking and crossword products, achieved revenue growth of nearly 57% to $15.6 million during the first nine months of 2019.
Heading into 2020, The New York Times plans to juice subscription growth by cashing in on its promotional investments. During the company's Q3 2019 earnings conference call in November, CEO Mark Thompson relayed that the newspaper is cutting down on the number of articles users can read anonymously, thus encouraging visitors to go through a registration process that should eventually result in higher subscriptions. Also, the company is attempting to convert customers who originally signed up in 2018 on a $1-per-week promotional digital subscription into full-price subscribers. Management should have more data on both of these efforts in the next two quarters.
Source Fool.com
