The Media Stock That Checks Every Buffett Box: Fox Corporation Scores 9/9

What Is Fox Corporation?

Fox Corporation is the media company that emerged from the 2019 split of 21st Century Fox, after Disney acquired most of the entertainment assets. What remained — and what Fox is today — is a focused portfolio of live news, live sports, and ad-supported streaming. The company operates Fox News, Fox Business, Fox Sports, the FOX broadcast network, and Tubi, its free ad-supported streaming platform.

Revenue comes from two primary sources: advertising and affiliate (distribution) fees paid by cable, satellite, and virtual pay-TV providers. The Television segment includes the FOX broadcast network, local TV stations, and Tubi. The Cable Network Programming segment houses Fox News Channel, Fox Business Network, and FS1/FS2. In its most recent quarter (Q2 fiscal 2026), Fox generated $5.18 billion in revenue, a 2% year-over-year increase.

Fox's competitive position is built on content that people watch live — news and sports. In an era where most scripted entertainment is time-shifted to streaming, Fox's programming retains its appointment-viewing character. That makes its advertising inventory more valuable and its distribution fees stickier than peers reliant on scripted content. Tubi, now exceeding 100 million monthly active users and achieving EBITDA profitability, adds a growing digital layer to the traditional broadcast business.

How Fox Corporation Scores on All 9 Buffettology Criteria

Fox earns a perfect 9/9 on the Buffettology scoring system. Here's how it performs on each criterion.

1. High Return on Equity — PASS (17.2%)

Buffettology requires ROE above 12%. Fox's 17.2% ROE clears the threshold by a healthy margin. This reflects a business that generates solid profits relative to its equity base, driven by high-margin news and sports programming that commands premium advertising and distribution rates.

2. High Return on Invested Capital — PASS (10.9%)

ROIC measures how efficiently a company deploys all its capital — both debt and equity — to generate returns. The threshold is 9%. Fox's 10.9% ROIC indicates the company earns more than its cost of capital, though it sits closer to the cutoff than some tech peers. Media businesses are inherently more capital-intensive than pure software, making this a respectable figure for the sector.

3. Cash Machine — PASS (12.9% FCF/Assets)

This criterion checks whether the company generates strong free cash flow relative to its total asset base. The threshold is 5%. At 12.9%, Fox converts a meaningful portion of its assets into cash every year — roughly $2.3 billion in annual free cash flow. Sports rights and news production require real spending, but Fox still generates substantial excess cash.

4. Fair Valuation — PASS (6.3% Earnings Yield)

The earnings yield (inverse of P/E) must exceed 3.5%. Fox's 6.3% earnings yield means the business generates an attractive return for every dollar of market capitalization. With a trailing P/E around 14.6x, Fox is valued well below the Communication Services sector average of roughly 27x.

5. Share Buybacks — PASS (-3.6% Share Dilution)

Buffett favors companies that return capital through buybacks rather than diluting shareholders. Fox's share count is declining at 3.6% annually. Management has been a consistent repurchaser, supplementing buybacks with a modest dividend (0.9% yield) to deliver nearly 4% total shareholder yield.

6. Defensible Moat — PASS (41.3% Gross Margin)

Gross margins above 40% indicate pricing power and a competitive moat. Fox's 41.3% clears the bar, though it's notably lower than asset-light software companies. The margin reflects the reality of media: live sports rights and news production cost real money, but Fox extracts enough value from its content to maintain pricing power. Fox News has been the most-watched cable news network for over two decades.

7. Simple Business — PASS

Fox operates in the Communication Services sector — a non-speculative, understandable business. It makes money by creating and distributing news, sports, and entertainment content through broadcast, cable, and streaming channels. Advertisers pay for audience attention. Distributors pay for the right to carry Fox's channels. Straightforward.

8. Conservative Debt — PASS (0.61x Debt/Equity)

The threshold is 1.5x. Fox's debt-to-equity ratio of 0.61x is conservative, especially for a media company. With $2.3 billion in annual free cash flow against modest leverage, the balance sheet provides ample flexibility for sports rights renewals, share buybacks, and strategic investments.

9. Consistent Growth — PASS (202.7% Five-Year Growth)

Five-year net income growth must be positive. Fox's 202.7% cumulative growth over five years is striking. This figure reflects the company's recovery and expansion from the post-split period, boosted by strong advertising cycles, political ad revenue in election years, and Tubi's rapid scaling. While year-over-year growth has been lumpier than a steady-state compounder, the five-year trajectory is unmistakably positive.

The Bull Case

Fox has several structural advantages that bulls see driving long-term value:

Live sports and news are irreplaceable. In a media landscape where scripted content is fragmenting across dozens of streaming services, live sports and news remain the last bastions of appointment television. Fox's NFL, MLB, NASCAR, FIFA World Cup, and college football rights give it a content portfolio that advertisers are willing to pay premium CPMs for — and that distributors can't afford to drop. The upcoming 2026 FIFA World Cup, hosted by the U.S., Canada, and Mexico, is a major near-term catalyst.

Tubi is inflecting. Fox's free ad-supported streaming platform surpassed 100 million monthly active users, achieved EBITDA profitability for two consecutive quarters, and grew revenue 19% in the most recent quarter. Viewer minutes were up 27%, the strongest engagement growth in seven quarters. Unlike peers burning billions on streaming, Fox built Tubi into a profitable business by leaning into AVOD (ad-supported video on demand) rather than trying to compete head-to-head with Netflix on subscriptions.

Record advertising revenue. Fox reported record Q1 fiscal 2026 advertising revenue of $1.4 billion, up 6% year-over-year, even without election-year political ad tailwinds. This demonstrates underlying demand for Fox's live programming inventory, not just cyclical boosts.

Aggressive capital return. With $2.3 billion in annual free cash flow, Fox is returning capital through consistent buybacks (3.6% annual share count reduction) and dividends. The total shareholder yield of nearly 4% is attractive for a company that's still growing.

Analyst consensus is bullish. Of 23 analysts covering Fox, 15 have Buy ratings and 8 have Hold — no Sells. Price targets range from $48 to $87, with Goldman Sachs at $87, Guggenheim at $85, and Bank of America at $80.

The Bear Case

Fox faces real structural and competitive headwinds that deserve honest consideration:

Cord-cutting is accelerating. Pay-TV households have dropped from 86 million in 2014 to roughly 56 million in 2025 — a 35% collapse — and the decline continues. Fox News, FS1, and Fox Business all depend on affiliate fees from cable and satellite distributors. Every cord-cutter directly reduces this revenue stream. By 2029, an additional 20 million subscribers are expected to cancel cable TV.

Linear TV advertising is in secular decline. National linear TV ad spend fell 10% in Q3 2025, while streaming ad revenues surged 18%. Fox's live sports and news content partially insulates it, but the broader migration of advertising dollars to digital and CTV platforms creates a structural headwind for the traditional business.

Earnings are lumpy and recently declining. Q2 fiscal 2026 net income dropped 36% year-over-year to $247 million, and adjusted EBITDA fell 11%. While some of this reflects tough comparisons to election-year quarters, it highlights the cyclicality inherent in a business tied to political advertising and sports scheduling.

Sports rights costs keep rising. Fox's competitive advantage in live sports depends on winning renewals, but rights fees are inflating aggressively. The NFL, MLB, and college sports conferences all extract higher prices with each cycle, compressing margins even as revenue grows.

Concentration risk. Fox is heavily dependent on a few content pillars — Fox News and live sports — rather than a diversified content portfolio. Any reputational, regulatory, or competitive disruption to these specific franchises would disproportionately affect the business.

Valuation Overview

Fox trades at a significant discount to both its sector and the broader market:

Trailing P/E: 14.6x vs. Communication Services sector average of ~27x
Forward P/E: 11.4x, implying meaningful earnings growth expected
Price-to-Sales: 1.64x
Price-to-Book: 2.45x
EV/EBITDA: 9.26x
FCF Yield: 8.48%
Earnings Yield: 6.94%

Fox's trailing P/E of 14.6x compares favorably to its own historical 5-year average of roughly 13.6x — slightly above average but not stretched. Against sector peers, the 56% discount to the Communication Services average is notable.

Analyst price targets range from $48 to $87. The consensus average sits around $70-76, implying roughly 15-25% upside from current levels near $60. Morningstar's fair value estimate is $55, suggesting the stock is currently trading near or slightly above intrinsic value by their more conservative methodology. A free cash flow-based model yields a fair value near $70.

With a forward P/E of 11.4x and an FCF yield of 8.5%, Fox offers a compelling value proposition for investors who believe live sports and news content will retain its premium positioning despite broader industry disruption.

The Buffettology Verdict

Fox Corporation's perfect 9/9 Buffettology score confirms what the financials demonstrate: this is a well-run, conservatively-financed business with consistent returns on capital, disciplined capital allocation, and a genuine competitive moat in live programming. The 202.7% five-year earnings growth, 17.2% ROE, and 0.61x debt-to-equity ratio paint the picture of a company that manages itself the way Buffett would want.

The key question for investors is whether Fox's traditional media business can navigate the secular shift from linear to streaming — and whether Tubi can grow fast enough to offset the decline. The early evidence is encouraging, but the transition is far from complete.

Want to see Fox Corporation's live Buffettology score with the latest data? Check FOX on Buffett Score.

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