USA Today's Digital Revival Is Gaining Steam, But With Plenty of Risk

Key Points

• USA Today is showing stronger profitability as its digital transformation begins to gain momentum.
• Digital revenue and audience growth are helping offset the long-term decline in the print business.
• The stock has surged nearly 140% over the past year, but the turnaround still carries meaningful risk.

The business of journalism has not been pretty the past couple decades, but USA Today NYSE: TDAY might finally be on the verge of looking attractive.

One of the most recognized media brands in America, the company for most of the past decade was a cautionary tale about what happens to newspaper businesses when the internet rewrites the rules.

Now, the company that publishes USA Today, as well as owning hundreds of local and regional papers across the country, is delivering stronger profits, accelerating digital growth, and improving revenue.

It hasn’t yet proven itself, but at least it appears headed in the right direction.

Investors who rightfully dismissed the company as a dying newspaper stock in years past might want to reconsider it today.

Digital Strategy Is Delivering Better Results

After years watching print advertising drop, readers move online, and revenues steadily decline, USA Today’s first quarter showed the company's protracted effort to transform itself into a digital media business is catching on.

Revenue in the year’s first three months was $548.5 million, and net income improved to a gain of $19.9 million from a loss of $7.3 million a year earlier. On a diluted per-share basis, the company reported earnings of 12 cents per share in contrast to a loss of 5 cents per share a year earlier.

The quarter this year and a year ago both contained several one-time adjustments. A more balanced comparison, removing one-time items including the impact of the sale of assets, shows a more impressive picture. Total adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 45% to $73.1 million from $50.5 million. The margin on these operations jumped to 13.3% from 8.8%.

For the full year 2026, the company is projecting a possible slight decline in overall same-store revenue, while total digital revenue is expected to climb to 50% of overall sales. Without pinpointing an amount, the company said it expects an increase in net income and adjusted EBITDA, while free cash flow should grow by double digits compared with the prior year.

Digital Revenue Continues to Replace Print

The latest figures did show that revenue dropped 4% compared with a year earlier, though the decline on a same-store basis showed an improvement over decreases in previous quarters.

Continuing a trend, revenue in the print and commercial segment fell more than 10% year-over-year. But the digital business picked up some of the slack, with revenue increasing more than 5% over the previous year on a same-store basis. Importantly, digital revenues accounted for nearly 48% of total revenue in the quarter, an all-time high for the company.

In particular, digital-only subscriptions showed year-over-year and sequential growth for the third consecutive quarter. In all, the company reported that it attracted 180 million average monthly unique visitors, including approximately 127 million from its U.S. media network and 53 million from its U.K. digital properties. Overall pageviews per month reached 1.4 billion across its digital platforms.

AI and Partnerships Expand Audience Growth

Changes in the media and online landscape were also evident. USA Today acknowledged that it was shifting from a significant dependence on referral traffic, presumably from social media, and have been looking to build traffic through other sources, including directly attracting reader attention.

AI licensing deals and partnerships have also begun contributing. The company has been investing in AI tools and expanding content, such as its high school sports hub, reflecting a deliberate effort to build engagement.

Other moves reinforce a sense of urgency. After agreeing to acquire the Detroit News from MediaNews Group earlier in the year, the company presented at the Rosenblatt 6th Annual Technology Summit in June, signaling a concerted effort to be seen by investors as a technology and digital media company.

A week later, USA Today Play, the company’s games portal, expanded its digital comics library through a partnership with Marvel Comics aimed at increasing the number of repeat visitors.

A Historic Media Brand Reinvents Itself

The moves are a far cry from the company's origins in 1982 when Gannett launched USA Today as the first national daily print newspaper. Before being rebranded last year from Gannett to USA Today, the company used that early success to build one of the largest newspaper portfolios in the world, acquiring regional and local titles across dozens of markets over the following decades.

Like others in the industry, including the New York Times NYSE: NYT and Lee Enterprises NASDAQ: LEE, pressures with the rise of online news hit every newspaper hard. Digital advertising migrated to Google and Facebook. Classified revenue evaporated. Print circulation fell ceaselessly. USA Today’s response was a years-long series of deep cost reductions and strategic pivots toward digital revenue. The strategy produced mixed results, and management committed to a digital-first strategy centered on audience growth, engagement, and diversified revenue streams.

Wall Street Is Warming to the Stock

Given these pressures, the company’s stock has reacted accordingly. Trading above $25 per share back in 2015, the stock fell below $1 per share by 2020. In the past 52 weeks, company has traded between $3.15 and about $8 per share, fluctuating as skepticism about legacy media mixes with optimism over improved results.

The optimism appears to have taken hold. The stock is up nearly 140% over the past 12 months, with a 70% gain since the start of this year.

Analyst coverage is thin, and given the recent runup, the current consensus rating is Hold. The average 12-month price target is $8.53, implying modest upside from current levels. Two analysts suggest Buy, with one analyst recommending Hold and another rating it a Sell. The highest price target is $10 per share, while the lowest is listed at $8 per share.

The Turnaround Still Faces Major Challenges

While the story appears positive, the risks are real. Media turnarounds have proven to be among the hardest to execute. Advertising revenue is cyclical, digital traffic can be volatile, and the structural decline of print advertising is ever-present. USA Today does not pay a dividend, so share appreciation is key for investors.

Still, results in the first quarter continue to show progress, and the company's national brand with an audience of 180 million visitors has a breadth that can capture a formidable potential.

The question is whether management can monetize the shift assuming sales from digital overtake the waning revenue of print. The stock is not for conservative investors, but for investors who understand media, USA Today might be a speculative turnaround worth watching and considering.