Fox Corporation: A Bull Case Theory with Undervalued Assets and Potential Upside

Fox Corporation (FOXA) is undervalued due to investor bias against declining linear TV. The company owns a 19% stake in FanDuel and 2.4% in Flutter Entertainment, yet these assets are not fully reflected in the current share price of $56.25. FOX trades at a modest 12.7x EV to 2027 FCF, well below peers, and is gaining share in free ad-supported streaming TV through Tubi. Conservative modeling suggests FOX's non-gambling assets are worth $8-$10 per share today and $12.34 by 2027. Valuing FOX's non-gambling assets at a WBD-like 13.5x FCF multiple implies a fair equity value of $68-$72 per share, a 20%-29% upside.

Fox Corporation (FOXA) has been a subject of interest for investors, with its stock trading at $56.25 as of July 31, 2025. Despite its modest price, the company is positioned as a compelling outperform candidate over the next 18–24 months, driven by a deeply undervalued portfolio of hidden assets. The company owns a 19% stake in FanDuel and 2.4% in Flutter Entertainment (FLUT), yet these assets are not fully reflected in the current share price [2].

Fox Corporation's trailing and forward P/E were 13.73 and 12.76, respectively, as of July 31, 2025. This valuation is well below peers trading at 14x–24x, largely due to investor bias linking its fate to declining linear television [2]. However, this view misses the resilience of FOX’s core assets—its dominant cable news network, FOX News, and its live sports focus via FOX Sports.

Fox has benefited from improving advertising trends despite tough comparisons from major international sports events like Copa America and the UEFA European Championship in the same period a year before. Advertising revenues grew 7.1% in the quarter, primarily due to continued digital growth led by Tubi, and higher news ratings and pricing [1].

Growth at Tubi significantly bolsters Fox by expanding its reach into the rapidly growing, ad-supported streaming sector, attracting large numbers of younger, cord-cutting viewers who are increasingly hard to reach through traditional television channels [1]. Building on this growing momentum, Fox is set to launch a subscription-based streaming service, Fox One, on August 21 for $19.99 per month, aiming to reach audiences beyond its mainstay cable television business.

In June, the company acquired sports-focused streaming platform and television channel Caliente TV to expand its sports broadcasting presence in Mexico [1]. Fox's total revenue rose 6.3% to $3.29 billion in the fourth quarter, beating estimates of $3.12 billion, according to data compiled by LSEG [1]. The company also reported a nearly 7% jump in revenue in its cable network programming unit to $1.53 billion, at a time when customers are shifting to digital streaming [1].

Adjusted profit attributable to Fox's stockholders was $1.27 per share, compared with estimates of 99 cents [1]. Conservative modeling suggests these assets are worth $8–$10 per share today and $12.34 by 2027. Valuing FOX’s non-gambling assets at a WBD-like 13.5x FCF multiple implies a fair equity value of $68–$72 per share, a 20%–29% upside [2].

With a strong balance sheet (1x net debt/EBITDA) and increasing investor awareness of its underappreciated streaming and gambling assets, FOX offers a favorable risk/reward skew with catalysts on the horizon, including a likely FanDuel monetization [2].

References:
[1] https://economictimes.indiatimes.com/news/international/us/fox-corp-share-price-buyback-how-fox-has-surpassed-all-challenges/articleshow/123121393.cms
[2] https://finance.yahoo.com/news/fox-corporation-foxa-bull-case-203013079.html