What Happened?
Shares of cable news and media network Fox (NASDAQ: FOXA) jumped 5.1% in the afternoon session after the company reported impressive first quarter 2025 results, which beat analysts' revenue, EPS, and EBITDA expectations. The outperformance came from a potent mix of sports and streaming, with the Super Bowl and Tubi's ad sales driving a 27% increase in sales. Zooming out, we think this quarter featured some important positives.
After the initial pop the shares cooled down to $52.27, up 4% from previous close.
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What The Market Is Telling Us
FOX’s shares are not very volatile and have only had 4 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock gained 5.5% on the news that the company reported strong third-quarter earnings that blew past analysts' sales and EPS expectations. The top line benefited from a 6% year on year growth in affiliate revenue, largely driven by a 10% growth in the Television business. The advertising business did even better, growing 11% year on year due to higher political advertising revenues at FOX Television. This highlights FOXA's ability to optimize its ad inventory, given the audience growth powered by its relatable content during the election season.
Other relevant factors explaining the improved growth include higher ratings and pricing, growth at Tubi (FOXA's streaming platform), and the impact of sports revenues such as broadcasts of the UEFA European Championship and CONMEBOL Copa América. The broad-based sales improvement flowed to the bottom line as the company's EBITDA exceeded Wall Street's expectations. Overall, this was a strong quarter, highlighting significant improvements across the board.
FOX is up 6.7% since the beginning of the year, but at $52.27 per share, it is still trading 9.9% below its 52-week high of $58 from February 2025. Investors who bought $1,000 worth of FOX’s shares 5 years ago would now be looking at an investment worth $2,062.
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