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Nexstar Media Group Inc NXST

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Stock XNAS Rating as of
$148.76 +6.34 (4.45%)
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Company Report

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Nexstar Earnings: Difficult Retransmission Negotiation Demonstrates Need for Attractive Content

Michael Hodel,

There were fewer things to like in no-moat Nexstar Media’s third-quarter results, as revenue fell 10.8% in the absence of political advertising, and adjusted EBITDA margin shrank to 20.8%, nearly half that of the prior-year quarter. The core business showed some expected softness as revenue excluding political ads fell 2.4% from a year ago and 10% from the second quarter because of the firm’s negotiations with DirecTV. Despite the declines, we believe that the issues tainting the quarter are temporary and that Nexstar will benefit from projected record 2024 political advertising and an improved economy. We maintain our $205 fair value estimate.

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Price vs Fair Value

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NXST is trading at a 31% discount.
Price
$142.39
Fair Value
$836.00
Uncertainty
High
1-Star Price
$417.88
5-Star Price
$576.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Nexstar can drive local ad revenue growth via its duopoly markets.

Bears

Declining local news consumption hurts local advertising revenue growth, a significant source of revenue for Nexstar.

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News

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Trading Information

Previous Close Price
$142.42
Day Range
$141.50–148.76
52-Week Range
$132.38–211.36
Bid/Ask
$148.64 / $148.77
Market Cap
$5.05 Bil
Volume/Avg
164,033 / 410,632

Key Statistics

Price/Earnings (Normalized)
9.37
Price/Sales
1.03
Dividend Yield
3.79%
Dividend Yield (Forward)
3.79%
Total Yield
19.70%

Company Profile

Nexstar is the largest television station owner/operator in the United States, with 200 stations in 116 markets. Of its 200 full-power stations, 155 are affiliated with the four national broadcasters: CBS, Fox, NBC, and ABC. The 2019 merger with Tribune made Nexstar the top broadcast affiliate for both Fox and CBS as well as the number-two partner for NBC and number three for ABC. The firm has networks in 12 of the top 20 television markets and reaches over 68% of U.S. TV households. Nexstar also owns NewsNation (formerly WGN), a nationwide pay-television network, 75% of The CW, and a 31% stake in Food Network and Cooking Channel.
Sector
Communication Services
Industry
Entertainment
Stock Style Box
Small Value
Total Number of Employees
12,971
Website
https://www.nexstar.tv

Competitors

Valuation

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Metric
NXST
FOXA
AMCX
Price/Earnings (Normalized)
 9.378.651.93
Price/Book Value
 2.091.370.72
Price/Sales
 1.031.010.25
Price/Cash Flow
 4.827.890.51
Price/Earnings
NXST
FOXA
AMCX

Financial Strength

Metric
NXST
FOXA
AMCX
Quick Ratio
 1.221.741.24
Current Ratio
 1.572.021.46
Interest Coverage
 2.154.660.14
Quick Ratio
NXST
FOXA
AMCX

Profitability

Metric
NXST
FOXA
AMCX
Return on Assets (Normalized)
 4.20%7.77%7.12%
Return on Equity (Normalized)
 19.98%16.02%41.29%
Return on Invested Capital (Normalized)
 8.59%9.76%11.66%
Return on Assets
NXST
FOXA
AMCX

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