Here’s why the “failing” New York Times stock just hit a record high

The New York Times stock price has been in a strong bull run and is hovering near its all-time high despite President Donald Trump claiming that it is “failing”. NYT was trading at $82.50 on Thursday, down slightly from its all-time high of $87. It has jumped by ~20% this year, beating the S&P 500 and Nasdaq 100 indices.

New York Times business is thriving as Trump calls it “failing”

President Donald Trump has always had a beef with the New York Times, the most popular American newspaper, which recently received an investment from Warren Buffett’s Berkshire Hathaway.

Trump started attacking the paper when he first running for the presidency. Still, despite all this, the stock has jumped by 587% in the last ten years, beating the S&P 500 and other top American indices.

The company has done well as other major similar companies have struggled in the past few years. Popular names like the Washington Post and the Los Angeles Times, which are now owned by billionaires, have had to shed workers as their losses jumped.

The most recent results showed that the company was firing on all cylinders, mostly helped by the regular news stories during Trump's presidency. This trend will likely continue in the foreseeable future, especially because of the ongoing tensions in the Middle East and the upcoming US midterm elections. 

A victory by Democrats, which most analysts expect, will likely lead to more stories, especially on investigations of the Trump administration.

The results showed that the company added 450k subscribers in the fourth quarter, bringing the total number to 12.7 million, while the average revenue per user (ARPU) jumped to $9.72.

The New York Times revenue jumped by 10% to $902 million, a good number for a company in a highly competitive industry. Its adjusted operating profit rose by 12.8%. This growth happened as the growth in digital subscriptions helped to offset the decline in print, a trend that will continue as more people opt for digital consumption.

The company believes that the growth has more room to grow, with the subscription revenue expected to grow by between 9% and 11% in the first quarter. Chances are that the real number will be better than this because of the Middle East crisis that likely led to more subscribers.

This growth, together with the Buffett investment, explains why the company has a premium valuation. It trades at a forward price-to-earnings ratio 31, higher than the sector median of 13. This valuation multiple is similar to that of Netflix.

NYT stock price technical analysis 

New York Times stock chart  |Source: TradingView 

The daily timeframe chart shows that the New York Times stock price has soared in the past few months. It soared from a low of $44.4 in April last year to a record high of $87 this month.

The stock has pulled back a bit after the new US-Iran ceasefire. It has remained above all moving averages, while the Relative Strength Index has moved from the overbought level of 74 to the current 52.

This retreat is happening as some of the investors book profits. Therefore, the stock will likely bounce back in the coming weeks, especially when the company publishes its financial results on May 6.