News Corporation (NWSA) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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News Corporation (NWSA)

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Intrinsic Value (DCF)

Current$26.70
Intrinsic$44.14
+65%
$29.75$44.14$71.44
Market implies 12% growth for 5 years
DCF analysis suggests NWSA could have 65% upside at 25% growth — verify assumptions match your view.
At $27, the market prices in 12% annual cash flow growth — a moderate expectation aligned with historical trends (25%).
Range: Bear $30 → Bull $71. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$55$59$64$69
10%$38$41$44$48
12%$29$31$33$36
14%$23$25$26$28

Bull Case

  • Bull case ($71) offers 168% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (12%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($30) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$908.75M
Year 2$1.14B
Year 3$1.42B
Year 4$1.77B
Year 5$2.22B
Terminal$32.65B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$727.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Frequently Asked Questions

Is NWSA stock undervalued or overvalued?
🟢 UNDERVALUED

NWSA trades at $26.70 vs. our DCF-derived intrinsic value of $36.40, implying +38% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of NWSA's future cash flows. The bear case ($23.55) still suggests upside, providing margin of safety.

What is NWSA's intrinsic value?

Using a 5-year DCF model: Base FCF of $727M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $537M net debt and dividing by 0.57B shares: Bear $23.55 | Base $36.40 | Bull $55.33. Current price $26.70 implies +38% to base case.

How is NWSA's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($21.28B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.