Superbowl LIX has a chance to be the most-watched NFL championship of all time and one stock that will benefit immensely is Fox Corporation (FOXA – Free Report) .
As the primary broadcaster of this year’s Superbowl, Fox could be on the cusp of record viewership this Sunday as the Kansas City Chiefs bid for the first “three-peat” in NFL history. On the other side is a very formidable and familiar opponent in the Philadelphia Eagles, a rematch from their Superbowl duel in 2023. Ironically, their previous meeting was the last time Fox had Superbowl rights and generated $600 million in sales. This game was the third highest in all-time Superbowl viewership, and the Chiefs title win last year hit the record with over 120 million people watching.
With a potential Chiefs versus Eagles rematch building momentum, Fox had already sold out all of its advertising slots months in advance, and some brands are rumored to have paid up to a record $7 million for a 30-second commercial.
Image Source: Sporting News
Fox Crushed Q2 Expectations
Recently reporting results for its fiscal second quarter on Tuesday, Fox’s EBITDA more than doubled year over year to a Q2 record of $781 million. This was driven by 20% revenue growth with Q2 sales at $5.07 billion compared to $4.23 billion a year ago. The top-line figure comfortably surpassed Q2 sales estimates of $4.88 billion.
Adjusted net income came in at $442 million or $0.96 per share, which nearly tripled from the comparative quarter and crushed the Zacks EPS Consensus of $0.65 by 47%. Fox has exceeded earning expectations for 10 consecutive quarters with an average EPS surprise of 24.2% in its last four quarterly reports.
Image Source: Zacks Investment Research
Fox is “Firing on all Cylinders”
Fox CEO Keith Murdoch stated the company is firing on all cylinders, seeing record political revenue following the presidential election both at Fox News and across its local stations. Carrying the momentum has been strong NFL, college football, and major league baseball postseason viewership along with the continued audience expansion at Tubi.
Furthermore, Fox expects its revenue growth to continue this year thanks to strong performance in affiliate fees, advertising, and digital initiatives. Based on Zacks estimates, Fox’s total sales are now projected to spike 12% in fiscal 2025 to $15.65 billion versus $13.98 billion last year. Plus, annual earnings are expected to soar 24% to $4.26 per share from EPS of $3.43 in 2024.
Regarding its digital initiatives, Fox plans to launch a new subscription streaming service by the end of 2025. The streaming service will focus on sports and news content, including live sports and Fox TV shows which will help target an audience outside of traditional cable viewers and assist with competing against Disney’s (DIS – Free Report) ESPN+ and Paramount Global (PARA – Free Report) ), the parent company of CBS.
FOXA Performance & Valuation
Sports fans are undoubtedly drawn to Fox’s coverage, and investors may have piqued interest in the company’s valuation. Despite soaring +80% in the last year, FOXA still trades at a very reasonable 12.7X forward earnings multiple and under the optimum level of less than 2X sales.
Image Source: Zacks Investment Research
Bottom Line
There will be a plethora of companies that benefit from Superbowl activities, but Fox will be the primary winner outside, of course, the Chiefs or the Eagles. That said, Fox stock sports a Zacks Rank #1 (Strong Buy) ahead of one of the most anticipated Superbowl’s in NFL history.
