Please ensure Javascript is enabled for purposes of website accessibility

Why The New York Times Stock Soared 31% So Far in 2020

By Demitri Kalogeropoulos - Jul 6, 2020 at 8:21AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Subscriptions are up, even though advertising revenue will be choppy over the next few quarters.

What happened

The New York Times (NYT -3.74%) shareholders are trouncing the market this year. Their stock jumped 31% compared to a 4% decline in the S&P 500 through the end of June, according to data provided by S&P Global Market Intelligence.

The stock dipped into negative territory during March's market swoon but has soared to a new 2020 high in recent weeks.

A man drinks coffee while reading his tablet.

Image source: Getty Images.

So what

Investors liked what they heard from the media giant in early February, when management revealed accelerating sales and profit growth thanks to strong uptake in its digital subscription products. The content producer managed to boost its membership base by 31% in fiscal 2019, management said.

The company followed that performance up by posting its best quarter for net subscriber growth yet, with memberships improving by nearly 600,000 in the fiscal first quarter of 2020. This success helped offset collapsing advertising revenue to keep revenue marching higher during the early days of the COVID-19 pandemic.

Now what

Investors will be watching subscriber growth trends and advertising rates over the next few quarters to see if The New York Times can maintain that positive momentum. Robust subscriber growth, plus higher monthly prices, implies a long runway for expanding profit margins ahead.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends The New York Times. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The New York Times Company Stock Quote
The New York Times Company
$33.74 (-3.74%) $-1.31

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/14/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.