- If you are wondering whether USA TODAY at US$7.45 is still interesting after a strong run, the key question is how that price compares with the value of the business.
- The stock is up 43.0% year to date and 113.5% over the past year, even though it slipped 0.7% over the last week and is up 3.9% over the past month. That kind of movement can change how you think about both risk and potential upside.
- Recent coverage has focused on USA TODAY as a media stock that has attracted attention after a 244.9% three year return and a 50.2% return over five years. That helps explain why valuation is front of mind for many investors. With that kind of long term track record, even small price moves now tend to draw extra scrutiny from those asking whether the stock still offers a reasonable entry point.
- USA TODAY currently has a valuation score of 2/6, so the company screens as undervalued on 2 of 6 checks. The rest of this article will walk through what different valuation methods say about that score and will point to an even richer way to think about value at the end.
USA TODAY scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: USA TODAY Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model takes estimates of the cash USA TODAY could generate in the future and discounts those cash flows back to today, to arrive at an estimated intrinsic value per share.
For USA TODAY, the model uses a 2 Stage Free Cash Flow to Equity framework based on cash flow projections. The latest twelve month free cash flow is about $66 million, and analysts and model estimates extend this to a projected free cash flow of around $127.7 million in 2035. Annual projections between 2026 and 2035 are individually discounted, reflecting the idea that cash received further in the future is worth less than cash received today.
When all of those discounted cash flows are added up, the DCF model points to an estimated intrinsic value of about $13.66 per share. Compared with the current share price of $7.45, the model implies the stock trades at roughly a 45.5% discount to that intrinsic value. This suggests a meaningful margin between price and estimated worth.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests USA TODAY is undervalued by 45.5%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.
Approach 2: USA TODAY Price vs Earnings
For profitable companies, the P/E ratio is a useful gauge because it ties what you pay directly to the earnings the business is generating today. It gives you a quick sense of how many dollars investors are currently willing to pay for each dollar of earnings.
What counts as a "normal" P/E depends on how fast earnings are expected to grow and how risky those earnings appear. Higher expected growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk often points to a lower one.
USA TODAY currently trades on a P/E of 37.44x. That sits above both the Media industry average of 24.66x and the peer average of 22.51x. This might initially suggest a richer valuation compared with a typical media stock. Simply Wall St’s Fair Ratio for USA TODAY is 33.35x. This Fair Ratio is a proprietary view of what the P/E might be based on factors such as earnings growth, profit margins, industry, market cap and company specific risks, so it goes beyond the broad brush comparison with sector or peer averages.
Since the Fair Ratio of 33.35x is meaningfully below the current 37.44x, the stock screens as trading above that Fair Ratio benchmark.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your USA TODAY Narrative
Earlier there was a reference to an even better way to think about valuation, and this is where Narratives come in, letting you attach a clear story and assumptions about USA TODAY’s future revenue, earnings and margins to a financial forecast and a Fair Value that you can compare directly with today’s share price.
On Simply Wall St’s Community page, Narratives are short, structured views that link what you believe about the business to numbers. This lets you see whether your Fair Value suggests the stock looks expensive or cheap versus the current price and use that gap to help decide whether to wait, buy more or start trimming a position.
Because Narratives update automatically as new earnings, news or other data are added to the platform, you do not need to rebuild a model every time something changes. You can also see how different investors look at the same stock, such as one Narrative that anchors on a Fair Value of about US$4.00 for USA TODAY and another closer to US$8.00, each based on different expectations for revenue trends, margins and future P/E multiples.
For USA TODAY, however, we will make it really easy for you with previews of two leading USA TODAY Narratives:
Fair value in this Narrative: US$8.21
Gap to that fair value at US$7.45: trading about 9.2% below this Narrative fair value on the latest close.
Revenue trend used in this view: revenue declining about 1.99% per year.
- Analysts in this Narrative frame USA TODAY as gradually shifting toward higher margin digital revenue, AI licensing and cost efficiency, which they expect to support earnings quality over time.
- The assumptions rely on profit margins rising from 1.3% to 5.9% and earnings reaching US$126.7m by around 2029, with the stock valued on a future P/E of 12.9x and a discount rate of 8.6%.
- The consensus target of US$8.21 sits only modestly above the recent US$7.50 reference in this Narrative, so the view is that the stock is roughly fairly priced if those earnings, margin and multiple assumptions play out.
Fair value in this Narrative: US$4.00
Gap to that fair value at US$7.45: trading about 86.3% above this Narrative fair value on the latest close.
Revenue trend used in this view: revenue declining about 4.04% per year.
- The more cautious Narrative focuses on execution risk around AI licensing partners, changing referral traffic from AI answer agents and the cost of investing in video and mobile formats, which together could limit digital earnings progress.
- Analysts in this camp plug in revenue falling about 4.0% a year, margins slipping from 4.1% to 2.8% and earnings easing to US$57.6m by 2029, with a future P/E of 12.8x and a higher discount rate of 9.0%.
- On those inputs, the bearish fair value of US$4.00 sits well below the share price used in the Narrative, so readers would need to be comfortable with weaker revenue, softer margins and a lower valuation anchor to agree with this view.
If you want to see how other investors are joining the dots between these types of assumptions and price, the Community Narratives page lets you line up more bull and bear cases side by side and stress test which set of numbers fits closest with your own expectations.
Curious how numbers become stories that shape markets? Explore Community Narratives
Do you think there's more to the story for USA TODAY? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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