Now that we've dug into management's comments about the business and the reasons to be optimistic about its prospects, let's explore the factors that could drive Twenty-First Century Fox, Inc. (NASDAQ:FOXA) stock lower.

An empire in transition

If Fox's failed bid for Time Warner (NYSE:TWX) proves anything, it's that the studio is undergoing a transition. And why not? Fox no longer has the right to distribute Star Wars movies; Disney (NYSE:DIS) took that privilege away when it purchased Lucasfilm for $4 billion in 2012. The studio's best remaining franchise is Avatar, and that won't be back on screens before 2016.

Avatar Movie Characters

Avatar is the biggest winner in Fox's history, and the biggest movie of all time. Credit: 21st Century Fox.

3 reasons Fox stock could fall

What could foil CEO Rupert Murdoch's plans as he and his team invest in new franchises? Here are three that stand out:

1. The potential for a fantastic flop

Fox hasn't always done well with its Marvel properties. Look at the X-Men. Brett Ratner's poorly received X-Men: The Last Stand kept the franchise in limbo until Matthew Vaughn's X-Men: First Class reintroduced fans to younger versions of Marvel's mutants. Bryan Singer's X-Men: Days of Future Past has since rebooted the franchise with over $745 million in global box office receipts, making it safe for Fox to invest once more. X-Men: Apocalypse is due in 2016.

The Fantastic Four, due next summer from director Josh Trank, lacks this sort of safety net. Tim Story's last try at a film starring Marvel's First Family -- Fantastic Four: Rise of the Silver Surfer -- flopped despite a strong performance from Laurence Fishburne as the Surfer. Mix in reports that Trank wants a film that's unlike anything fans of the comics have seen previously, and this starts to come off as a risky, if intriguing, bet.

2. Investments could go on for years

While Fox has good reason to celebrate its success launching Fox Sports 1 and 2, executives have made clear that expansion is still ongoing and the next several years could bring new spending on programming and infrastructure. Profits won't be easy to come by.

"As we indicated a year ago during our Investor Day, our growth in fiscal 2015 will be affected by the continuation of several strategic initiatives, most notably, the continued planned investments into our new sports and entertainment networks here in the U.S. and internationally, particularly in India," CFO John Nallen said during the most recent earnings call.

3. Keeping pace with expectations may be tough

Murdoch wants to invest upwards of $6 billion on repurchasing Fox stock. Won't that spark a rally? I wouldn't be too sure. Fox bought back $4 billion of its shares over the prior 12 months, only to watch the stock badly trail the return of the S&P 500.

FOXA Chart

FOXA data by YCharts

It's also tough to quantify Murdoch's claim that Fox stock is cheap at current prices. According to S&P Capital IQ, Fox stock trades for nearly 21 times earnings vs. 21.7 for Disney and just 16.3 for Warner. "Reasonably priced considering its growth prospects" is probably a better descriptor, and even then Fox stock won't move without the company first making good on its franchise bets.

Foolish takeaway

Every transition has risks. In the case of Fox stock, big bets on new franchises could go sideways as investments in sports programming take longer to pay off. Mix in high expectations from Wall Street -- expectations set by Murdoch's bold claims -- and there's a reasonable chance today's investors in Fox stock could suffer another year of below-market returns.

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Google (A and C class), Netflix,Time Warner, and Walt Disney at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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