Fox (FOXA) Margin Decline To 11.4% Reinforces Bearish Profitability Narrative

Q3 2026 results snapshot

Fox (FOXA) has reported solid top line and earnings for the recent period, with the latest quarterly revenue at about US$5.2 billion and basic EPS of roughly US$0.53, set against trailing 12 month revenue of US$16.6 billion and EPS of US$4.24. Over the last few reported quarters, revenue has ranged from US$3.3 billion to US$5.2 billion while basic EPS has moved between US$0.53 and US$1.79. This gives investors a clear sense of how the earnings power of the business has shifted across different revenue levels. With trailing net profit margins in the data now below last year, the focus from here is likely to be on how consistently Fox can defend its profitability.

See our full analysis for Fox.

With the headline numbers on the table, the next step is to see how they line up against the market narratives around Fox, highlighting where sentiment matches the data and where it may need a rethink.

See what the community is saying about Fox

Margins Slip From 14.4% To 11.4%

• Over the last 12 months, Fox's trailing net profit margin moved from 14.4% to 11.4%, alongside trailing net income of US$1.9b on US$16.6b of revenue.
• Bears argue that rising content and sports rights costs will squeeze profitability, and the margin drift in the trailing data lines up with that concern.
  • The bearish narrative points to escalating NFL, college football and MLB rights, and the move from 14.4% to 11.4% margin shows earnings are not keeping pace with total costs.
  • With quarterly net income in recent periods ranging from US$229 million to US$827 million, critics highlight how fixed programming costs can weigh more heavily when revenue is at the lower end of that range.

Skeptics say this is just the start of longer term pressure on Fox's TV model, while others think it is a temporary earnings air pocket shaped by sports and political cycles. That split view is exactly what the bears are watching. 🐻 Fox Bear Case

P/E Of 14.9x Versus Peers At 23.4x

• Fox trades on a trailing P/E of 14.9x, very close to the US Media industry average of 14.8x, yet well below the peer group average of 23.4x at a share price of US$66.16.
• Supporters of the bullish view point out that this lower P/E, alongside mixed but still positive long run earnings growth, sits next to a DCF fair value of about US$94.86.
  • The DCF fair value of US$94.86 is about 43% above the current share price of US$66.16, which bulls see as a valuation gap compared with both peers on 23.4x P/E and the modelled intrinsic value.
  • Five year annualized earnings growth of 5.4% in the data is modest but positive, and bulls argue that a P/E near the industry average does not fully reflect the cash flow implied in that DCF figure.

Optimists argue that a solid earnings track record, a P/E discount to peers and a wide gap to DCF fair value could all matter more than the recent margin dip if Fox keeps converting its audience into cash flow. 🐂 Fox Bull Case

Revenue Growth Around 2.4% With EPS At US$4.24

• Trailing 12 month revenue in the data sits at about US$16.6b with Basic EPS of US$4.24, and revenue growth is shown at roughly 2.4% per year with earnings expected to grow about 5% per year from this base.
• The consensus style narrative flags that these mid single digit earnings expectations and low single digit revenue growth rely heavily on Fox holding its position in live news, sports and ad supported streaming.
  • Forecast revenue growth of about 2.4% a year is slower than the 11.6% forecast for the broader US market in the data, so any slip in audience or pricing power could pull EPS growth below the 5% assumption.
  • At the same time, TTM EPS of US$4.24 and TTM net income of US$1.9b give Fox a meaningful earnings base, which supporters of the consensus view see as enough to support those modest growth expectations if current trends hold.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Fox on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Mixed messages in the data or a clear story taking shape; either way, check the numbers for yourself, weigh the trade offs, and see how 2 key rewards and 1 important warning sign

See What Else Is Out There

Fox is working from a solid earnings base, but softer net profit margins and only low single digit revenue growth show the business is not firing on all cylinders.

If you want ideas that aim to balance valuation and quality more tightly than this margin and growth profile, check out the 45 high quality undervalued stocks for stocks that may offer a different risk and return profile.

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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