Download PDF

1. Company Snapshot

1.a. Company Description

Lee Enterprises, Incorporated provides local news and information, and advertising services in the United States.The company offers print and digital editions of daily, weekly, and monthly newspapers and publications; and web hosting and content management services.It also provides advertising and marketing services, such as audience extension, search engine optimization, search engine marketing, web and mobile production, social media services, and reputation monitoring and management.


In addition, the company offers integrated digital publishing and content management solutions for creating, distributing, and monetizing multimedia content for media publications, universities, television stations, and niche publications.Further, it provides commercial printing services; distributes third party publications; and operates a digital marketing agency.The company was founded in 1890 and is based in Davenport, Iowa.

Show Full description

1.b. Last Insights on LEE

Lee Enterprises' recent performance was negatively impacted by a Q2 loss of $2.07 per share, exceeding the Zacks Consensus Estimate of a loss of $0.58. The company's revenue fell short of expectations, indicating a decline in subscription and advertising sales. Additionally, the company's bid price deficiency, as notified by Nasdaq, poses a threat to its continued listing on the exchange. Furthermore, the departure of key executives and the appointment of a new Chief Operating Officer may signal internal restructuring efforts, potentially disrupting the company's operations.

1.c. Company Highlights

2. Lee's Digital Transformation Gains Traction Despite Earnings Miss

Lee's fiscal 2025 performance was marked by significant digital revenue growth, with total revenue reaching $562 million, 53% of which was digital. The company's digital subscription revenue grew 16% year-over-year to $94 million, driven by 633,000 digitally-only subscribers. However, the actual EPS came out at -$1.06, missing estimates of -$0.06. Revenue growth was in line with expectations, but the earnings miss was significant. The company's adjusted EBITDA growth guidance for 2026 is in the mid-single digits, which is relatively modest.

Publication Date: Dec -20

📋 Highlights
  • Total Digital Revenue Growth: Fiscal 2025 digital revenue reached $298 million (53% of total revenue), driven by a 16% YoY growth in digital subscription revenue ($94 million) from 633,000 digital-only subscribers.
  • Amplify Digital Agency Performance: Surpassed $100 million in FY25 revenue with 5% same-store growth, supported by AI tool adoption and 5% same-store digital revenue growth.
  • Subscription Momentum: Digital subscription revenue grew 32% annually over three years, outpacing industry peers by more than double.
  • Strategic Financial Moves: A $50 million common stock rights offering is planned to support digital transformation, with potential $18 million annual interest savings post-debt rate reduction (9% to 5%).

Digital Business Continues to Drive Growth

The digital business was a strong foundation for Lee's future growth, with Amplify Digital Agency surpassing the $100 million mark in FY '25 with 5% growth on a same-store basis. The company's digital transformation strategy is taking hold across the enterprise, with 2% digital revenue growth on a same-store basis. The management cited that the improved customer performance, combined with accelerating adoption of AI-powered tools, directly fueled 5% same-store revenue growth in Amplify Digital Agency.

Valuation and Leverage

Lee's valuation metrics are mixed, with a P/S Ratio of 0.04 indicating relatively low revenue multiples, but an EV/EBITDA of 27.89 suggesting high enterprise value relative to EBITDA. The Net Debt / EBITDA ratio is high at 26.61, indicating significant leverage. However, the company's sole lender, Berkshire Hathaway, is supportive of Lee's long-term future, and the planned rights offering is expected to reduce interest rates on outstanding debt from 9% to 5% for five years, resulting in $18 million annual interest savings.

Outlook and Risks

The analysts' estimates for next year's revenue growth are at -0.1%, indicating a relatively flat outlook. Lee's long-term target is 90% digital revenue by fiscal year 2030, which will require continued investment in digital transformation. The company's ability to execute on this strategy and reduce leverage will be key to its future success. The upcoming departure of CFO Tim Milledge in 2026 may also introduce some uncertainty.

3. NewsRoom

Card image cap

Lee Enterprises, Incorporated (LEE) Q1 2026 Earnings Call Prepared Remarks Transcript

Feb -10

Source: seekingalpha.com

Card image cap

Lee Enterprises Reports Strong First Quarter Results and Closing of Strategic Investment

Feb -10

Source: globenewswire.com

Card image cap

Lee Enterprises and Hudl Partner to Expand Access to High School Sports, Connecting Fans, Athletes, and Coaches to Local Communities at Scale

Feb -09

Source: globenewswire.com

Card image cap

Lee Enterprises Closes Strategic Investment, Welcomes David Hoffmann to Board

Feb -05

Source: globenewswire.com

Card image cap

VIRGINIA NATIONAL BANKSHARES CORPORATION APPOINTS ROBERT LEE BURROWS, JR. TO BOARD OF DIRECTORS

Feb -05

Source: prnewswire.com

Card image cap

Lee Enterprises (NYSE:LEE) Shares Pass Above Two Hundred Day Moving Average – Here’s What Happened

Feb -03

Source: defenseworld.net

Card image cap

Lee Enterprises plans quarterly call and webcast February 10, 2026

Jan -29

Source: globenewswire.com

Card image cap

Lee Enterprises (NYSE:LEE) Shares Cross Above Two Hundred Day Moving Average – Time to Sell?

Jan -08

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.79%)

6. Segments

Print Subscription

Expected Growth: 1.83%

Lee Enterprises' 1.83% growth in Print Subscription is driven by strategic acquisitions, expanding digital offerings, and targeted marketing efforts. Additionally, the company's focus on local news and community engagement has helped to retain and attract subscribers. Furthermore, the shift towards subscription-based models has contributed to revenue growth, as consumers increasingly prioritize quality content.

Digital Advertising

Expected Growth: 10.55%

Lee Enterprises' 10.55% growth in Digital Advertising is driven by increasing online presence, strategic partnerships, and targeted marketing efforts. Rising demand for digital media, growing e-commerce, and expanding online user base also contribute to this growth. Additionally, the company's focus on data-driven advertising solutions and investments in digital infrastructure further support this upward trend.

Print Advertising

Expected Growth: 1.83%

Lee Enterprises' 1.83% growth in Print Advertising is driven by increasing demand for local news and information, strategic acquisitions, and cost savings initiatives. Additionally, the company's focus on digital transformation and targeted marketing efforts have contributed to the growth. Furthermore, the company's ability to adapt to changing consumer behavior and preferences has also supported the growth in this segment.

Digital-Only Subscription

Expected Growth: 10.47%

Lee Enterprises' digital-only subscription growth of 10.47% is driven by increasing demand for online news, successful implementation of subscription-based models, and strategic partnerships. Additionally, the company's focus on digital transformation, investment in user experience, and targeted marketing efforts have contributed to the growth.

Print Other

Expected Growth: 2.8%

Lee Enterprises' 2.8% growth in Print Other segment is driven by increasing demand for specialty publications, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital integration and targeted marketing efforts have contributed to revenue growth.

Digital Other

Expected Growth: 27.8%

Lee Enterprises' Digital Other segment growth of 27.8% is driven by increasing online advertising revenue, expansion of digital marketing services, and growing demand for digital subscriptions. Additionally, strategic acquisitions and investments in digital platforms have contributed to the segment's rapid growth.

7. Detailed Products

Newspaper Publishing

Lee Enterprises publishes 46 daily newspapers and hundreds of weekly, classified, and specialty publications across the United States.

Digital Marketing Services

Lee Enterprises offers a range of digital marketing services, including website design, search engine optimization, and social media management.

Commercial Printing

Lee Enterprises provides commercial printing services, including offset printing, digital printing, and mailroom services.

Online Advertising

Lee Enterprises offers targeted online advertising solutions, including display ads, video ads, and native ads.

Event Hosting

Lee Enterprises hosts and sponsors various events, including concerts, festivals, and community events.

8. Lee Enterprises, Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Lee Enterprises, Incorporated has a moderate threat of substitutes due to the availability of alternative sources of news and information, such as online news websites and social media platforms.

Bargaining Power Of Customers

Lee Enterprises, Incorporated has a low bargaining power of customers due to its diversified customer base and lack of concentration of customers.

Bargaining Power Of Suppliers

Lee Enterprises, Incorporated has a moderate bargaining power of suppliers due to the presence of multiple suppliers of newsprint, ink, and other raw materials.

Threat Of New Entrants

Lee Enterprises, Incorporated has a low threat of new entrants due to the high barriers to entry in the newspaper publishing industry, including the need for significant capital investment and established distribution networks.

Intensity Of Rivalry

Lee Enterprises, Incorporated operates in a highly competitive industry with many established players, leading to a high intensity of rivalry among competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 95.93%
Debt Cost 9.35%
Equity Weight 4.07%
Equity Cost 10.06%
WACC 9.38%
Leverage 2354.41%

11. Quality Control: Lee Enterprises, Incorporated passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Scholastic

A-Score: 5.4/10

Value: 8.2

Growth: 4.2

Quality: 3.9

Yield: 5.0

Momentum: 7.0

Volatility: 4.0

1-Year Total Return ->

View Full Report
Stock-Card
John Wiley & Sons

A-Score: 5.3/10

Value: 7.5

Growth: 2.9

Quality: 6.2

Yield: 7.0

Momentum: 2.0

Volatility: 6.0

1-Year Total Return ->

View Full Report
Stock-Card
Globalstar

A-Score: 4.3/10

Value: 3.4

Growth: 7.3

Quality: 3.2

Yield: 0.0

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

View Full Report
Stock-Card
EDC

A-Score: 3.6/10

Value: 9.8

Growth: 2.7

Quality: 4.2

Yield: 1.0

Momentum: 2.0

Volatility: 1.7

1-Year Total Return ->

View Full Report
Stock-Card
Gannett Co

A-Score: 3.5/10

Value: 5.7

Growth: 3.6

Quality: 4.3

Yield: 0.0

Momentum: 4.5

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
Lee Enterprises

A-Score: 2.7/10

Value: 8.2

Growth: 2.1

Quality: 4.4

Yield: 0.0

Momentum: 0.0

Volatility: 1.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

8.62$

Current Price

8.62$

Potential

-0.00%

Expected Cash-Flows