Investors in The New York Times Company (NYT) have had a good time lately, watching the stock rise to $10, which has netted them a return of over 40% in the last three months. We think one of the catalysts for the rapid rise was NYT’s renewed focus on digital offerings, which was strengthened by the divestiture of non-core assets such as the About Group. However, in contrast to the market, we aren’t so bullish on the company’s prospects. We think that, in particular, the market is too optimistic on digital subscription and revenue per page view growth. Additionally, the market seems to be ignoring the impact of negative secular trends on the company’s print division.

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