Is Fox Stock Still an Opportunity After TikTok US Deal Talks?

Deciding what to do with Fox stock right now? You’re not alone. With a stock price that’s surged more than 128% over the last five years and an especially strong 26.5% jump in the current year, Fox has been anything but quiet. Even in the last 30 days, it’s managed a modest 0.7% gain, though the past week took a minor dip of -1.5%. Those kinds of swings certainly catch the eye, and they’re not happening in isolation. Recent headlines hint at both new opportunities and shifts in how investors view potential risks around the company.

Lately, buzz around possible Fox involvement in the TikTok U.S. deal has been swirling, especially with the Murdochs in the media spotlight. While Lachlan Murdoch hasn’t stepped in individually, speculation about Fox Corporation’s potential participation adds a layer of intrigue and possibly growth for the company. Meanwhile, news that Meta is considering licensing articles from Fox for AI projects speaks to the company’s ongoing relevance in the digital space.

Of course, share price moves only tell part of the story. Whether Fox is actually undervalued right now is the critical question for investors. The company currently earns a value score of 4 out of 6, meaning it checks the box on four key undervaluation criteria. So, how do those scores break down, and is there more to the story than the numbers alone? Up next, let’s dig into the main valuation methods the market uses. Then I’ll share a smarter way to look at Fox’s true value.

Fox delivered 50.3% returns over the last year. See how this stacks up to the rest of the Media industry.

Approach 1: Fox Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by projecting its future cash flows and then discounting them back to the present day. This approach helps investors gauge what Fox could be worth if it continues generating cash at current or projected rates.

Currently, Fox generates an annual free cash flow of about $2.95 billion. Analysts provide detailed estimates for the next five years, projecting a mix of growth and stability in cash generation. By 2030, Fox’s free cash flow is expected to reach approximately $2.44 billion, with further projections extending into 2035 by leveraging extrapolations. All values are calculated in U.S. dollars.

Based on these projections, the DCF model produces an estimated intrinsic value for Fox stock of $110.90 per share. This suggests that, at current market prices, Fox stock is trading at a 44.1% discount to its intrinsic value. In other words, the DCF analysis indicates that Fox is significantly undervalued compared to what its projected cash flows justify.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Fox.

Our Discounted Cash Flow (DCF) analysis suggests Fox is undervalued by 44.1%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Fox Price vs Earnings (PE Ratio)

The Price-to-Earnings (PE) ratio is widely regarded as the go-to metric for valuing profitable businesses, such as Fox. It measures how much investors are paying for each dollar of the company’s earnings, offering a simple but powerful snapshot of value relative to what’s earned. Typically, higher expected earnings growth or lower perceived risk will justify a higher "normal" PE multiple. In contrast, slower growth or more uncertainty means investors demand a lower one.

Fox currently trades at a PE ratio of 12.2x. For context, the average media industry stock trades at 20.8x, and Fox’s peer group averages 10.3x. On the surface, this may make Fox look relatively inexpensive compared to its industry, but closer to its peers. That is where Simple Wall St’s "Fair Ratio" helps sharpen the picture. The proprietary Fair Ratio for Fox is 18.6x, which is calculated based on the company’s earnings growth outlook, risk factors, profit margins, industry dynamics, and market cap.

The Fair Ratio is a more complete benchmark than industry or peer averages because it personalizes the comparison to Fox’s unique fundamentals rather than broad categories. In other words, it accounts for factors that generic averages simply cannot "see." Comparing Fox’s actual PE of 12.2x to its Fair Ratio of 18.6x, Fox’s shares look undervalued on this widely used metric.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Fox Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a simple, intuitive way for you to connect your own story and perspective about a company, such as expected revenue growth, future profit margins, and what could shape Fox’s future, to a concrete financial forecast and eventual fair value estimate. Narratives allow you to go beyond just looking at numbers; they help you tie those numbers to real events, risks, and opportunities that matter most to your investment decision. On the Simply Wall St platform, available to millions of investors on the Community page, you can easily create or explore Narratives for Fox, see at a glance how the current Price compares to the Fair Value under each story, and decide if the company is a buy, sell, or hold for you. Best of all, Narratives update dynamically whenever fresh news or new earnings data comes in, helping keep your view aligned with reality. For example, recent Fox Narratives range from very cautious (with a low price target of $48 based on shrinking TV audiences and rising content costs) all the way up to highly optimistic (with a top price target of $72, assuming resilient live sports demand and digital growth), clearly showing that different investors see Fox’s story and value very differently.

Do you think there's more to the story for Fox? Create your own Narrative to let the Community know!

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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