News Corp's Strategic Share Buybacks and EBITDA Growth: A Compelling Case for Value Investors

In the ever-shifting landscape of media and information, News Corp has emerged as a standout performer, leveraging fiscal 2025's record EBITDA and robust cash flow to launch a $1 billion share repurchase program. For value investors, this represents a rare confluence of disciplined capital allocation, undervaluation, and long-term growth potential.

EBITDA Growth: A Foundation for Shareholder Value

News Corp's fiscal 2025 results were nothing short of stellar. Total segment EBITDA surged to $1.42 billion, a 14% increase year-over-year, driven by its three core pillars: Digital Real Estate Services, Dow Jones, and Book Publishing. The Digital Real Estate segment alone contributed $601 million in EBITDA, a 18% rise, while Dow Jones added $588 million, up 8%. Even the News Media segment, historically more volatile, showed resilience, with cost discipline and digital innovation boosting margins.

The company's strategic divestiture of the Foxtel Group to DAZN in April 2025 further strengthened its balance sheet, generating $380 million in liquidity and aligning the business with higher-margin, digital-first operations. This shift has positioned News Corp to capitalize on secular trends in professional information services and real estate technology, areas where it holds significant competitive advantages.

Buybacks as a Lever to Close the Valuation Gap

The newly authorized $1 billion buyback program, combined with $300 million remaining from a prior authorization, gives News Corp $1.3 billion in repurchase capacity. This aggressive move is rooted in a clear thesis: the stock is trading at a meaningful discount to its net asset value. CFO Lavanya Chandrasekar has emphasized that equity shrinkage is a key tool to address this gap, a strategy that prioritizes returning capital to shareholders while maintaining flexibility for reinvestment in high-growth areas.

The rationale is compelling. With $571 million in free cash flow for FY2025 and a current ratio of 1.68, News Corp has the financial strength to execute the buyback without compromising its ability to fund innovation. The proceeds from the Foxtel sale will further accelerate repurchases in fiscal 2026, creating a flywheel effect where reduced share counts amplify earnings per share (EPS) growth.

Undervaluation and Long-Term Capital Appreciation

News Corp's intrinsic value is underscored by its high-margin, recurring revenue streams in professional information and real estate services. The Dow Jones Professional Information business, for instance, saw 21% revenue growth in Risk and Compliance services in Q4 2025, reflecting demand for data-driven decision-making in a volatile macroeconomic environment. Similarly, Digital Real Estate's 13% EBITDA growth in the quarter highlights the durability of its platforms in a digital-first world.

Yet, the stock's valuation remains unloved. At a price-to-EBITDA multiple of 6.5x, News Corp trades well below its historical average of 8.5x, even as EBITDA margins expand. This disconnect suggests the market is underappreciating the company's structural advantages: a diversified portfolio of cash-generative assets, a disciplined approach to capital allocation, and a strategic pivot toward high-growth digital services.

Investment Implications

For value investors, News Corp presents a rare opportunity to participate in a company that is both profitable and undervalued. The buyback program acts as a floor for the stock price, while the company's focus on reinvesting in high-margin segments—such as AI licensing and professional information services—creates a path for long-term capital appreciation.

However, risks remain. The real estate and media sectors are cyclical, and macroeconomic headwinds could pressure advertising revenue or real estate transaction volumes. That said, News Corp's emphasis on B2B and subscription-based models insulates it from many of these risks, as these segments are less sensitive to consumer spending fluctuations.

Conclusion

News Corp's fiscal 2025 results and strategic buyback program offer a masterclass in value creation. By combining record EBITDA growth, disciplined capital returns, and strategic reinvestment, the company is positioning itself for sustained outperformance. For investors with a long-term horizon, the current valuation offers an attractive entry point to a business that is not only navigating industry disruption but also leading it.

In a market obsessed with short-term volatility, News Corp's focus on durable assets and shareholder value stands out. As the buyback program gains momentum, the company's intrinsic value is likely to close the gap with its stock price—rewarding patient investors with both capital appreciation and a stronger, leaner business.