What is FOXA's Intrinsic value?

Fox Corp (FOXA) Intrinsic Value Analysis

Executive Summary

As of May 29, 2026, Fox Corp's estimated intrinsic value ranges from $56.85 to $102.30 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $102.30 +56.2%
Discounted Cash Flow (5Y) $85.76 +31.0%
Dividend Discount Model (Multi-Stage) $76.18 +16.3%
Dividend Discount Model (Stable) $56.85 -13.2%
Earnings Power Value $80.16 +22.4%

Is Fox Corp (FOXA) undervalued or overvalued?

With the current market price at $65.48, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Fox Corp's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 0.5 0.61
Cost of equity 6.2% 8.3%
Cost of debt 4.8% 5.2%
Tax rate 25.7% 26.6%
Debt/Equity ratio 0.24 0.24
After-tax WACC 5.7% 7.4%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 6.5% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $16,300 (FY06-2025) to $27,050 (FY06-2035)
  • Net profit margin expansion from 14% to 14%
  • Capital expenditures maintained at approximately 3% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $86 $39,485M 79.8%
10-Year Growth $102 $46,524M 63.8%
5-Year EBITDA $64 $30,190M 73.6%
10-Year EBITDA $84 $38,817M 56.6%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 16.7%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.2%
  • Long-term growth rate: 1.0%
  • Fair value: $76.18 (16.3% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.3% (Low) to 6.2% (High)
  • Long-term growth rate: 0.5% (Low) to 1.5% (High)
  • Fair value range: $36 to $78
  • Selected fair value: $56.85 (-13.2% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $2,381M
Discount Rate (WACC) 7.4% - 5.7%
Enterprise Value $32,137M - $42,070M
Net Debt $3,004M
Equity Value $29,133M - $39,066M
Outstanding Shares 425M
Fair Value $68 - $92
Selected Fair Value $80.16

Key Financial Metrics

Metric Value
Market Capitalization $27855M
Enterprise Value $30859M
Trailing P/E 16.28
Forward P/E 12.34
Trailing EV/EBITDA 7.85
Current Dividend Yield 104.71%
Dividend Growth Rate (5Y) -4.28%
Debt-to-Equity Ratio 0.24

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 30% $30.69
Discounted Cash Flow (5Y) 25% $21.44
Dividend Discount Model (Multi-Stage) 20% $15.24
Dividend Discount Model (Stable) 15% $8.53
Earnings Power Value 10% $8.02
Weighted Average 100% $83.91

Investment Conclusion

Based on our comprehensive valuation analysis, Fox Corp's intrinsic value is $83.91, which is approximately 28.1% above the current market price of $65.48.

Key investment considerations:

  • Strong projected earnings growth (14% to 14% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.24)

Given these factors, we believe Fox Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.