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Nine Entertainment Co. Holdings Ltd NEC

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Morningstar’s Analysis

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Nine’s Plan for Stan Strengthens its Lifespan

Brian Han Director

Analyst Note

| Brian Han |

We lift our fair value estimate for Nine by 8% to AUD 2.60 per share. Of the AUD 0.20 upgrade, AUD 0.14 primarily reflects increases to our longer-term EBITDA forecasts for 9Now and higher revenue expectations for Stan. 9Now’s growth momentum continues to positively surprise, as evidenced by the 48% increase in its fiscal 2021 EBITDA to AUD 73 million versus our AUD 63 million forecast. While Stan’s recent earnings escalation will be halted by a step-up in content spend, we see the investment as boosting the SVOD unit’s future sustainable revenue base. The rest of the upgrade relates to incorporation of Morningstar’s recent fair value estimate increase for 59%-owned Domain to AUD 3.80, from AUD 3.50 previously.

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Company Profile

Business Description

Nine Entertainment operates Nine Network, a free-to-air television network spread across five capital cities, as well as in regional Northern New South Wales and Darwin. It also owns Australia's third- largest portfolio of online digital properties, one that reaches more than 60% of the country's active online audience. The merger with Fairfax combines Nine's top-ranked TV network and the second- largest newspaper group, topped with a collection of quality digital assets in Nine Digital, subscription video on demand operator Stan, and Fairfax's 59%-owned Domain. It ensures the merged entity remains relevant in the eyes of audiences and advertisers.

1 Denison Street, Level 9
Sydney, NSW, 2060, Australia
T +61 299069999
Sector Communication Services
Industry Broadcasting
Most Recent Earnings
Fiscal Year End Jun 30, 2022
Stock Type