Friday, May 05, 2023
Lee Enterprises, Incorporated provides local news, information, and advertising primarily in midsize markets in the United States. It publishes 49 daily newspapers, as well as offers 300 weekly newspapers and specialty publications in 23 states. The company also provides online advertising and services; and online infrastructure and online publishing services for approximately 1,500 daily and weekly newspapers and shoppers. In addition, it offers commercial printing services. The company has a strategic alliance with Yahoo!, Inc. to provide its classified employment advertising customer base the opportunity to post job listings and other employment products on Yahoo!�s HotJobs national platform. Lee Enterprises, Incorporated was founded in 1890 and is based in Davenport, Iowa.
Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.
Patrick McCann, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Solid Q2 results. Q2 revenue of $170.7 million, missed our estimate of $173.7 million by 1.7%. While revenue came in slightly lower than expected adj. EBITDA of $14.3 million beat our estimate of $13.5 million by 6.4%. The results benefited from stronger than expected high margin digital subscription revenue. Notably, print cost reductions were enacted late in Q2, resulting in $9 million of savings in the quarter.
Industry leading digital subscriber growth. The company achieved 596,000 digital subscribers and digital revenue now comprises 38% of total revenue. For 13 consecutive quarters, it experienced the fastest digital subscriber growth in the industry, with an impressive compound annual growth rate (CAGR) of 49%. It appears to be well on its way to reach its goal of 900,000 digital subscribers and digital revenue comprising 50% of total revenue by 2026.
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