Is NY Times' Poised For A Post-Earnings Rally?

Forbes

05-05-2025

New York Times building in Manhattan, New York City, United States of America on July 16th, 2024. ... More (Photo by Beata Zawrzel/NurPhoto via Getty Images)
The New York Times' stock (NYSE: NYT) is set to announce its fiscal first-quarter earnings on Wednesday, May 7, 2025, with analysts anticipating earnings of 34 cents per share on $635 million in revenue. This would indicate a 42% year-over-year increase in earnings and a 7% rise in sales compared to the previous year's results of 24 cents per share and $594 million in revenue. Historically, the NY Times' stock has tended to outperform after earnings announcements, increasing 60% of the time with a median one-day gain of 3.9% and a maximum observed gain of 12%.
Looking forward to Q1 2025, NYT expects year-over-year growth of 14% to 17% in digital-only subscription revenue, along with a mid-single-digit rise across other revenue streams. Adjusted operating expenses are projected to increase by 5% to 6%, attributed to planned investments in technology and content creation. The company's legal stance regarding intellectual property and its ongoing technological efforts are crucial to its strategy for maintaining competitive advantage and subscriber engagement. The NYT currently holds a market capitalization of $8.5 billion. In the past twelve months, it reported $2.6 billion in revenue, with $351 million in operating profit and $294 million in net income.
For event-driven traders, historical trends can provide an advantage, whether by positioning prior to earnings or responding to post-release movements. If you're aiming for upside with lower volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative, outperforming the S&P 500 and achieving returns over 91% since its inception. See earnings reaction history of all stocks.
Here are some insights on one-day (1D) post-earnings returns:
Further data for observed 5-Day (5D) and 21-Day (21D) returns post-earnings is summarized in the table below along with the statistics.
NYT 1D, 5D, and 21D Post Earnings Return
A relatively lower-risk approach (though not ideal if the correlation is low) is to analyze the correlation between short-term and medium-term returns following earnings, identify a pair with the highest correlation, and execute the appropriate trade. For instance, if 1D and 5D demonstrate the strongest correlation, a trader can adopt a 'long' position for the next 5 days if the 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
NYT Correlation Between 1D, 5D, and 21D Historical Returns
Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (a combination of all three: the S&P 500, S&P mid-cap, and Russell 2000), resulting in strong returns for investors.