FOX (NASDAQ:FOX) Shares Gap Down - Should You Sell?

Key Points

• FOX shares gapped down sharply after news of a $22 billion Roku acquisition, with the stock opening well below its prior close and falling about 15.6% intraday. Investors appear concerned about dilution, financing complexity, and whether the deal will deliver an attractive return.
• The Roku deal is being pitched as a major boost to Fox’s streaming strategy, expanding its reach in free, ad-supported TV and connected television. Management called it a “defining moment” that could improve Fox’s ability to compete in the streaming wars.
• Despite the selloff, FOX has had solid recent fundamentals: its last quarterly results beat estimates on both EPS and revenue. Analyst sentiment remains mixed but leans positive overall, with an average “Moderate Buy” rating and a $75 price target.

Fox Corporation (NASDAQ:FOX - Get Free Report)'s stock price gapped down before the market opened on Monday . The stock had previously closed at $58.92, but opened at $52.03. FOX shares last traded at $49.0260, with a volume of 837,116 shares traded.

FOX News Summary

Here are the key news stories impacting FOX this week:

• Positive Sentiment: The Roku acquisition could strengthen Fox’s streaming strategy, giving Fox Corporation broader reach in free, ad-supported TV and a larger footprint in connected television. Fox Corporation announces $22B acquisition of Roku in landmark streaming and live TV deal
• Positive Sentiment: Management framed the transaction as a “defining moment” that could help Fox compete more effectively in the streaming wars and monetize its content across a bigger distribution platform. Fox to buy streaming device maker Roku for $22 billion
• Neutral Sentiment: Analysts and media reports say the deal could create a major player in U.S. television, but the long-term benefits depend on successful execution and whether Fox keeps Roku and Tubi operating as separate services. Fox to Buy Roku in $22 Billion Deal for Streaming Device and Technology Company
• Negative Sentiment: FOX shares are under pressure because the market may be worried about dilution, financing complexity, and whether paying about $22 billion for Roku can generate an attractive return. Fox Corp. Stock Slumps on $22B Roku Deal While Murdoch Calls It a “Defining Moment”

Analyst Ratings Changes

A number of research analysts have commented on FOX shares. Zacks Research upgraded shares of FOX from a "hold" rating to a "strong-buy" rating in a research note on Tuesday, May 12th. Weiss Ratings restated a "buy (b-)" rating on shares of FOX in a research note on Friday, May 22nd. Finally, Bank of America restated an "underperform" rating and issued a $45.00 price objective (down from $80.00) on shares of FOX in a research note on Wednesday, February 25th. One equities research analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating, one has given a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the stock has an average rating of "Moderate Buy" and an average price target of $75.00.

FOX Trading Down 15.6%

The stock has a market cap of $20.89 billion, a PE ratio of 13.23, a P/E/G ratio of 6.95 and a beta of 0.54. The business's fifty day moving average is $57.58 and its 200 day moving average is $58.57. The company has a quick ratio of 2.65, a current ratio of 2.90 and a debt-to-equity ratio of 0.60.

FOX (NASDAQ:FOX - Get Free Report) last released its quarterly earnings data on Monday, May 11th. The company reported $1.32 EPS for the quarter, topping analysts' consensus estimates of $1.02 by $0.30. The firm had revenue of $3.99 billion for the quarter, compared to the consensus estimate of $3.78 billion. FOX had a net margin of 10.56% and a return on equity of 18.90%. As a group, analysts predict that Fox Corporation will post 4.76 earnings per share for the current year.

Institutional Trading of FOX

A number of institutional investors have recently added to or reduced their stakes in the stock. Marshall Wace LLP lifted its holdings in shares of FOX by 792.4% in the third quarter. Marshall Wace LLP now owns 3,184,642 shares of the company's stock valued at $182,448,000 after purchasing an additional 2,827,768 shares in the last quarter. Andra AP fonden lifted its holdings in shares of FOX by 2.7% in the third quarter. Andra AP fonden now owns 1,110,900 shares of the company's stock valued at $63,643,000 after purchasing an additional 29,200 shares in the last quarter. Bank of New York Mellon Corp lifted its holdings in shares of FOX by 1.5% in the fourth quarter. Bank of New York Mellon Corp now owns 666,815 shares of the company's stock valued at $43,296,000 after purchasing an additional 10,165 shares in the last quarter. Gamco Investors INC. ET AL lifted its holdings in shares of FOX by 10.0% in the first quarter. Gamco Investors INC. ET AL now owns 585,183 shares of the company's stock valued at $31,073,000 after purchasing an additional 53,166 shares in the last quarter. Finally, Gabelli Funds LLC lifted its holdings in shares of FOX by 2.3% in the first quarter. Gabelli Funds LLC now owns 579,800 shares of the company's stock valued at $30,787,000 after purchasing an additional 13,200 shares in the last quarter. Hedge funds and other institutional investors own 26.41% of the company's stock.

FOX Company Profile

Fox Corporation NASDAQ: FOX is a U.S.-based media company that operates television broadcast, news and sports businesses. The company traces its contemporary structure to the 2019 reorganization that followed the sale of certain entertainment assets to The Walt Disney Company; Fox Corporation retained a portfolio centered on the Fox Broadcasting Company, Fox Television Stations, Fox News Media and Fox Sports. Over time the company has expanded its digital footprint through acquisitions and direct-to-consumer services, building a mix of linear and streaming distribution.

FOX's core activities include the creation, aggregation and distribution of television programming and live sports, the operation of national cable news and business networks, and the ownership and operation of local broadcast stations.

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