Latest news with #NXST
Yahoo
09-05-2025
- Business
- Yahoo
Nexstar Media Group Inc (NXST) Q1 2025 Earnings Call Highlights: Navigating Revenue Challenges ...
Net Revenue: $1.23 billion, a decline of 3.9% compared to the prior year. Distribution Revenue: $762 million, increased by 0.1% over the prior year quarter. Advertising Revenue: $460 million, decreased by 10.2% over the prior year quarter. Political Advertising Revenue: $6 million, a decrease of $32 million from the prior year. Adjusted EBITDA: $381 million, representing a 30.9% margin, decreased by $71 million from the prior year. Adjusted Free Cash Flow: $348 million, compared to $389 million last year. Capital Expenditures (CapEx): $35 million, a decrease from $44 million in the prior year. Net Interest Expense: $97 million, a reduction of $17 million from the prior year. Outstanding Debt: $6.5 billion, a reduction of $28 million for the quarter. Cash Balance: $253 million at quarter end. First Lien Covenant Ratio: 1.67 times, well below the covenant of 4.25 times. Total Net Leverage: 2.93 times at quarter end. Warning! GuruFocus has detected 4 Warning Signs with NXST. Release Date: May 08, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Nexstar Media Group Inc (NASDAQ:NXST) reported a strong start to 2025 with solid financial results, including record first quarter distribution revenue. The company is well-positioned to capitalize on potential deregulation, which could lead to strategic mergers and acquisitions. Nexstar's diversified revenue streams, with 63% coming from distribution and other sources, provide stability amid economic uncertainties. The CW network showed significant improvement, with its strongest primetime performance in eight quarters, driven by new content strategies. News Nation continues to grow its audience, outperforming competitors like MSNBC and CNN in key demographics, and gaining recognition as a trusted national news source. Nexstar Media Group Inc (NASDAQ:NXST) experienced a 3.9% decline in net revenues compared to the prior year, primarily due to a reduction in political advertising. The advertising market remains challenging, with a 10.2% decrease in advertising revenue, impacted by softness in the television advertising market. Subscriber attrition continues to be a concern, although there are signs of marginal improvement in subscriber trends. The CW network's profitability declined in the first quarter due to increased sports programming amortization. The company faces potential risks from elevated interest rates and reduced maximum leverage, affecting the cost of capital for new transactions. Q: What is the expected timeline for regulatory changes if the fifth FCC commissioner is confirmed soon? A: Perry Sook, Chairman and CEO, indicated that an NPRM (Notice of Proposed Rulemaking) could be one of the first actions taken by the FCC Chairman to revisit ownership rules. He expects momentum in Washington to continue, with potential M&A activity coming into focus as the year progresses. Q: Are you comfortable with beginning transactions under the conditionality of the FCC's new procedures if an NPRM is issued? A: Perry Sook stated that Nexstar is willing to take calculated risks for opportunities, and they would consider putting pen to paper during the pendency of an NPRM, depending on circumstances and having a willing counterparty. Q: How is the current advertising market performing, and what are the expectations for the rest of the year? A: Lee Gliha, CFO, noted that the advertising market is currently down in the mid-single digits year-over-year, similar to Q1 results. They expect a pickup in the back half of the year due to the elimination of crowd-out effects. Q: How do you prioritize between expanding your national footprint and increasing in-market duopolies? A: Perry Sook emphasized that growing the national footprint has more strategic importance than adding a second or third station in a market. However, both have strategic importance, and they focus on acquisitions that are more accretive than buying back stock. Q: What is the impact of the current regulatory environment on potential M&A activities? A: Perry Sook mentioned that the DOJ understands the need for marketplace realities in transactions, and there is broad agreement in the industry for consolidation. The NAB board unanimously supports eliminating national cap and in-market ownership restrictions, which could facilitate M&A activities. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
01-05-2025
- Business
- Yahoo
3 Reasons to Avoid NXST and 1 Stock to Buy Instead
Over the past six months, Nexstar Media's shares (currently trading at $149.58) have posted a disappointing 15.5% loss while the S&P 500 was down 2.9%. This was partly driven by its softer quarterly results and may have investors wondering how to approach the situation. Is now the time to buy Nexstar Media, or should you be careful about including it in your portfolio? Get the full stock story straight from our expert analysts, it's free. Despite the more favorable entry price, we're sitting this one out for now. Here are three reasons why NXST doesn't excite us and a stock we'd rather own. Examining a company's long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Nexstar Media grew its sales at a 12.2% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds. Forecasted revenues by Wall Street analysts signal a company's potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite. Over the next 12 months, sell-side analysts expect Nexstar Media's revenue to drop by 8.4%, a decrease from its 1.9% annualized growth for the past two years. This projection is underwhelming and implies its products and services will see some demand headwinds. If you've followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can't use accounting profits to pay the bills. Over the next year, analysts predict Nexstar Media's cash conversion will fall. Their consensus estimates imply its free cash flow margin of 21.4% for the last 12 months will decrease to 17.2%. Nexstar Media isn't a terrible business, but it doesn't pass our quality test. After the recent drawdown, the stock trades at 11× forward price-to-earnings (or $149.58 per share). This valuation is reasonable, but the company's shakier fundamentals present too much downside risk. We're pretty confident there are superior stocks to buy right now. We'd recommend looking at one of our all-time favorite software stocks. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Comfort Systems (+751% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
Forbes
17-04-2025
- Business
- Forbes
Nexstar Media's Cash Flow Increases The Safety Of Its Dividend Yield
Businessman holding virtual download icon progress for increasing value added to business product ... More and service concept. With so many cross currents in the stock market, what can you trust? Who can you trust? The short answer is that you can trust high-quality fundamentals to guide your investment process through good markets and bad. Look no farther than Warren Buffet – the greatest investor of all time. He's not a MOMO, FOMO or crypto bro. Not at all, he's always been about deep fundamental analysis, reading annual reports and doing real diligence. I take the Warren Buffet approach one step further by adding technology. Specifically, the Robo-Analyst AI is proven to deliver superior fundamental research and stock ratings. This technology gives me an edge and is a big part of why my stock picks and Bloomberg Indices beat the market. I use the same technology to build all of my model portfolios, including the Safest Dividend Yields Model Portfolio. This portfolio only includes stocks that earn an attractive or very attractive rating, have positive free cash flow (FCF) and economic earnings, and offer a dividend yield greater than 3%. Dividend paying stocks can provide a safe-haven, but only if the underlying companies generate enough cash to cover the dividends. This portfolio only holds stocks for companies that generate enough FCF to support the dividend. I think the stocks in this portfolio can outperform in the current market and beyond. This stock pick provides a summary of how I pick stocks for the Safest Dividend Yields Model Portfolio. Nexstar Media Group Inc (NXST) is the featured stock in March's Safest Dividend Yields Model Portfolio. Nexstar Media Group has grown revenue and net operating profit after tax (NOPAT) by 12% and 17% compounded annually, respectively, since 2019. The company's NOPAT margin improved from 15% in 2019 to 18% in 2024, while invested capital turns rose from 0.4 to 0.5 over the same time. Rising NOPAT margins and invested capital turns drive the company's return on invested capital (ROIC) from 6% in 2019 to 9% in 2024. Figure 1: Nexstar Media Group's Revenue & NOPAT Since 2019 NXST Revenue and NOPAT - 2019-2024 Nexstar Media Group has increased its regular dividend from $0.56/share in 1Q20 to $1.86/share in 1Q25. The current quarterly dividend, when annualized provides a 4.1% dividend yield. The company's free cash flow (FCF) easily exceeds its regular dividend payments. From 2020 through 2024, the company generated $6.3 billion (46% of current enterprise value) in FCF while paying $771 million in regular dividends. See Figure 2. Figure 2: Nexstar Media Group's FCF Vs. Regular Dividends Since 2020 NXST FCF and Dividends: 2020-2024 As Figure 2 shows, this company's dividends are backed by a history of reliable cash flows. Dividends from companies with low or negative FCF are less dependable since the company might not be able to sustain paying dividends. At its current price of $183/share, NXST has a price-to-economic book value (PEBV) ratio of 0.8. This ratio means the market expects the company's NOPAT to permanently fall 20% from 2024 levels. This expectation seems overly pessimistic given that the company has grown NOPAT 17% compounded annually over the last five years and 25% compounded annually over the past decade. Even if the company's: the stock would be worth $228/share today – a 25% upside. In this scenario, the company's NOPAT would grow just 2% compounded annually through 2034. Should the company's NOPAT grow more in line with historical growth rates, the stock has even more upside. Below are specifics on the adjustments I make based on Robo-Analyst findings in this featured stock's 10-K: Income Statement: I made over $700 million in adjustments with a net effect of removing just over $250 million in non-operating expenses. Balance Sheet: I made over $1 billion in adjustments to calculate invested capital with a net increase of just under $1 billion. The most notable adjustment was for asset write downs. Valuation: I made over $8 billion in adjustments to shareholder value, with a net decrease of around $8 billion. Other than total debt, the most notable adjustment to shareholder value was for deferred tax liability. Disclosure: David Trainer, Kyle Guske II, and Hakan Salt receive no compensation to write about any specific stock, style, or theme.
Yahoo
02-04-2025
- Business
- Yahoo
Nexstar Media Group, Inc. (NXST): A Bull Case Theory
We came across a bullish thesis on Nexstar Media Group, Inc. (NXST) on Substack by Value Don't Lie. In this article, we will summarize the bulls' thesis on NXST. Nexstar Media Group, Inc. (NXST)'s share was trading at $178.76 as of April 1st. NXST's trailing and forward P/E were 8.35 and 11.52 respectively according to Yahoo Finance. A television broadcaster preparing a new Spanish-language program for its viewers. Nexstar Media Group (NXST) is the largest local TV broadcaster in the U.S., with 200 stations across 40 states, a 77% stake in The CW, a 33% stake in the Food Network, and a digital footprint reaching 103 million monthly visitors. The business operates through two primary revenue streams: distribution fees from cable, satellite, and streaming aggregators, and advertising revenue from TV, digital platforms, and major events. While the traditional cable bundle is in decline, streaming carriage offers a potential offset, though the long-term transition remains uncertain. Despite concerns over linear TV's secular decline, NXST has demonstrated strong financial performance. The company generates stable free cash flow (FCF) of around $1 billion annually, with minimal capex requirements. Since 2016, it has repurchased 35% of its outstanding shares while also reducing debt, balancing aggressive capital returns with financial prudence. With leverage trending downward and a disciplined capital allocation strategy, NXST's buyback program remains a powerful tool to drive shareholder value, assuming no major shifts in its industry dynamics. Regulatory changes present potential upside, particularly with incoming FCC leadership under Brendan Carr. If ownership rules are relaxed, NXST could pursue further acquisitions, leveraging cost synergies to enhance profitability. Historically, the company has executed transformative M&A, most notably with Media General in 2017 and Tribune in 2019. However, regulatory constraints have curtailed further dealmaking, forcing NXST to focus on organic growth and capital returns. At current levels, NXST trades at just 5.4x FCF and 11.8x EV/FCF, reflecting the market's skepticism toward legacy broadcasters. Cable TV subscribers have declined from 105 million in 2010 to 66 million today, with virtual subscribers only partially offsetting losses. If subscriber declines stabilize and NXST maintains an average of $850 million in annual FCF over the next five years, it could repurchase another 35% of its shares, driving FCF per share to $43. A modest 6x multiple would imply a valuation of $258 per share, representing a ~10% IRR. The primary risk remains the long-term trajectory of the broadcast model. If revenue declines accelerate, fixed costs could pressure margins. Additionally, NXST may slow buybacks to preserve cash for opportunistic acquisitions. However, the current valuation compensates for these risks, with optionality for regulatory-driven M&A acting as a catalyst. Investors are essentially betting that NXST's capital allocation and industry positioning will generate strong returns, even amid an evolving media landscape. Nexstar Media Group, Inc. (NXST) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 31 hedge fund portfolios held NXST at the end of the fourth quarter which was 27 in the previous quarter. While we acknowledge the risk and potential of NXST as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NXST but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. This article was originally published at Insider Monkey. Sign in to access your portfolio
