5 Reasons I Like Gannett Stock in 2022
Gannett (NYSE: GCI), the largest news publisher in the country, had a nice run in 2021, with its stock up about 75% at year's end. The stock is still down from pre-covid levels, though, after hitting a pandemic low of $0.72 per share in 2020. After its big merger with New Media Investment Group, management has been revamping the business to get more digitally oriented and diversify into newer, more exciting streams of revenue. As I've written before, I see Gannett as a turnaround play. Here are five reasons I like Gannett heading in 2022.
Gannett owns large news brands like USA Today, Detroit Free Press, and Indy Star. It also owns hundreds of weekly and daily newspapers across the country. But the old newspaper business has fallen out of favor, with print circulation declining along with ad revenue. The challenge has been how to best monetize Gannett's online presence. Aside from more traditional publishing revenue, the company has been building its digital marketing solutions segment, which includes search and display advertising, search optimization, social media, website development, web presence products, customer relationship management, and software-as-a-service solutions. In the third quarter of 2021, digital revenues of $265 million were up nearly 18% from the prior-year period and made up roughly 33% of total revenue in the quarter.
Between September of 2020 and September of this year, Gannett's paid digital subscribers grew more than 46%, from 1.06 million to 1.54 million. Gannett has launched two subscription apps -- USA Today Sports+ and the USA Today crossword app -- and is rolling out a fully digital subscription model for USA Today. Management's goal is to reach 10 million digital subscribers over the next five years. It seems like they have a long way to go before reaching this goal, but the business seems to be moving in the right direction.
Source Fool.com
