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Fox Corporation is undervalued, with a 12.7x EV to 2027 FCF, well below peers. The company owns a 19% stake in FanDuel and 2.4% in Flutter Entertainment, which are not fully reflected in the current share price. FOX News and FOX Sports are resilient assets, and Tubi is gaining share in free ad-supported streaming TV with a potential 20-25% EBITDA margin in five years. 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), trading at $55.76 as of July 31, 2025, presents an intriguing investment opportunity with a compelling valuation thesis. The company's share price, currently at $56.25, does not fully reflect its substantial hidden assets and resilient core businesses. Analysts and investors alike are drawing attention to FOXA's undervalued position, driven by a deeply undervalued portfolio of hidden assets.

Fox Corporation owns a 19% stake in FanDuel and a 2.4% stake in Flutter Entertainment (FLUT), which are not fully appreciated in the current share price. These stakes, combined with Fox Corporation's dominant cable news network (FOX News) and live sports focus (FOX Sports), contribute to its overall value. Additionally, Tubi, Fox's free ad-supported streaming TV (FAST) service, is gaining traction, commanding 2.2% of U.S. TV viewership and outperforming services like Peacock and Paramount+.

Tubi, though not yet profitable, is expected to reach 20–25% EBITDA margins in five years, positioning it as a future growth engine. 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.

Fox Corporation's strong balance sheet, with a net debt/EBITDA ratio of 1x, further supports its investment case. The company's recent earnings report [2] highlighted robust advertising growth from Tubi and stronger pricing in its news division, with adjusted earnings coming in at $1.27 per share, beating the analyst consensus of $0.98. Revenue rose 6% year-over-year to $3.29 billion, and net income attributable to shareholders more than doubled to $717 million.

Flutter Entertainment's acquisition of the remaining 5% stake in FanDuel for approximately $1.755 billion [3] strengthens Fox Corporation's position in the U.S. sports betting industry. This acquisition increases Flutter's leadership and operational efficiency in major markets, while the strategic partnership with Boyd Gaming Corporation ensures continued access to profitable markets.

Despite the undervaluation and hidden assets, Fox Corporation is not on the list of the 30 Most Popular Stocks Among Hedge Funds. Only 44 hedge fund portfolios held FOXA at the end of the first quarter, indicating limited institutional interest. However, the company's potential for significant upside and favorable risk/reward skew may attract more investors, particularly as the streaming and gambling assets gain more recognition.

In conclusion, Fox Corporation presents an undervalued investment opportunity with a compelling valuation thesis. Its hidden assets, resilient core businesses, and strong balance sheet make it an attractive option for investors seeking potential upside with a favorable risk/reward profile.

References:
[1] https://finance.yahoo.com/news/fox-corporation-foxa-bull-case-203013079.html
[2] https://site.financialmodelingprep.com/market-news/fmp-fox-beats-on-earnings-as-tubi-news-drive-advertising-gains
[3] https://www.igamingtoday.com/flutter-secures-full-ownership-of-fanduel-in-1-755-billion-deal-with-boyd-gaming/