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Nine Entertainment Co. Holdings Ltd NEC

Morningstar Rating
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Stock XASX Rating as of
A$1.24 0.01 (0.40%)
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As of Delayed Price Closed

Company Report

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Nine Entertainment Earnings: Ready and Waiting for Advertising Rebound

Brian Han

Shares in Nine continue to languish, trading at half of our unchanged AUD 2.70 fair value estimate. While fiscal 2024 underlying EBITDA fell 12% to AUD 517 million, it exceeded our forecast by 9%, driven by upside surprises in TV and publishing. Management's outlook is understandably circumspect, given the stubborn advertising recession. However, the group's revenue fundamentals remain well poised to snap back on a recovery in advertiser sentiment.

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Price vs Fair Value

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NEC is trading at a 128% premium.
Price
A$1.23
Fair Value
A$9.40
Uncertainty
High
1-Star Price
A$8.68
5-Star Price
A$9.84
Economic Moat
Mbn
Capital Allocation
Zrykcbkw

Bulls Say, Bears Say

Bulls

Nine Entertainment commands a strong position in the Australian free-to-air television industry, with number-two ratings and revenue share positions.

Bears

Nine Entertainment's recent increase in ratings and revenue share has come at the expense of Ten Network. There is a risk of mean-reversion as Ten Network recovers from its current all-time low position.

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News

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Trading Information

Previous Close Price
A$1.24
Day Range
A$1.22–1.24
52-Week Range
A$1.19–2.07
Bid/Ask
A$1.23 / A$1.25
Market Cap
A$1.96 Bil
Volume/Avg
2.3 Mil / 3.6 Mil

Key Statistics

Price/Earnings (Normalized)
9.98
Price/Sales
0.76
Dividend Yield (Trailing)
6.88%
Dividend Yield (Forward)
7.29%
Total Yield
10.33%

Company Profile

Nine Entertainment is the largest media conglomerate in Australia. It operates Nine Network, a free-to-air TV network across five capital cities, as well as in a number of regional areas. It owns 9Now, a leading broadcast video on demand, or BVOD, operation. Its publishing unit is the second-largest newspaper group in Australia with key mastheads such as Australian Financial Review, Sydney Morning Herald, and The Age. Nine also operates a leading domestic-owned subscription video on demand, or SVOD, business in Australia called Stan, and a talk-based radio network. It has a 60% interest in Domain, the number-two player in the lucrative Australian digital property listings market.
Sector
Communication Services
Industry
Entertainment
Stock Style Box
Small Value
Total Number of Employees
5,254
Website
https://www.nineforbrands.com.au

Competitors

Valuation

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Metric
NEC
SXL
SWM
Price/Earnings (Normalized)
 9.9813.942.49
Price/Book Value
 1.230.570.67
Price/Sales
 0.760.230.20
Price/Cash Flow
 6.805.544.47
Price/Earnings
NEC
SXL
SWM

Financial Strength

Metric
NEC
SXL
SWM
Quick Ratio
 0.541.640.86
Current Ratio
 1.031.671.41
Interest Coverage
 4.041.522.52
Quick Ratio
NEC
SXL
SWM

Profitability

Metric
NEC
SXL
SWM
Return on Assets (Normalized)
 4.71%0.64%5.23%
Return on Equity (Normalized)
 11.45%1.52%19.33%
Return on Invested Capital (Normalized)
 8.88%2.81%11.52%
Return on Assets
NEC
SXL
SWM

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