Loading...

Emmis Communications

Nasdaq:EMMS
Snowflake Description

Fair value with imperfect balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
EMMS
Nasdaq
$46M
Market Cap
  1. Media
Company description

Emmis Communications Corporation, a diversified media company, engages in radio broadcasting activities in the United States. More info.


Add to Portfolio Compare Print Invest
  • Emmis Communications is not covered by any analysts.
SHARE PRICE
3 Month History
EMMS
Industry
5yr Volatility vs Market

Value

 Is Emmis Communications undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Emmis Communications to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

  • The current share price of Emmis Communications is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Emmis Communications's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Emmis Communications's earnings available for a low price, and how does this compare to other companies in the same industry?
  • Emmis Communications is good value based on earnings compared to the US Media industry average.
  • Emmis Communications is good value based on earnings compared to the US market.
Price based on expected Growth
Does Emmis Communications's expected growth come at a high price?
  • Unable to calculate PEG ratio for Emmis Communications, we can't assess if it's growth is good value.
Price based on value of assets
What value do investors place on Emmis Communications's assets?
  • Emmis Communications is good value based on assets compared to the US Media industry average.
X
Value checks
We assess Emmis Communications's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Media industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Media industry average (and greater than 0)? (1 check)
  5. Emmis Communications has a total score of 3/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (0%).

    Full details on the Value part of the Simply Wall St company analysis model.
X
Discounted cash flow (2 Stage Free Cash Flow to Equity)

The calculations below outline how an intrinsic value for Emmis Communications is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast

Present value of next 5 years cash flows:
$21

Terminal Value

Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = $7 × (1 + 2.47%) ÷ (17.53% – 2.47%)

Terminal value based on the Perpetuity Method where growth (g) = 2.47%:
$48

Present value of terminal value:
$21

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
$43 = $21 + $21

Value = Total value / Shares Outstanding ($43 / 13)

Discount to Share Price

Value per share:
$3.36

Current discount (share price of $3.55): -5.66%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 17.53% = 2.47% + (2 * 7.53%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($45,758,952).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

3.041 = 0.96 (1 + (1- 30%) (309.47%))

Levered Beta used in calculation = 2



Assumptions
  1. The risk free rate of 2.47% is from the 10 year government bond rate in USD.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (7.53%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

Future Performance

 How is Emmis Communications expected to perform in the next 1 to 3 years based on estimates from 0 analysts?

  • Emmis Communications is not covered by any analysts.
The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
18.9%
Expected Media industry annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Emmis Communications expected to grow at an attractive rate?
  • Unable to compare Emmis Communications's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
  • Unable to compare Emmis Communications's earnings growth to the US market average as no estimate data is available.
  • Unable to compare Emmis Communications's revenue growth to the US market average as no estimate data is available.
Annual Growth Rates Comparison
Analysts growth expectations
Super high growth metrics
High Growth Checks
  • Unable to determine if Emmis Communications is high growth as no earnings estimate data is available.
  • Unable to determine if Emmis Communications is high growth as no revenue estimate data is available.
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Emmis Communications is expected to be perform poorly due to negative earnings.

Improvement & Relative to industry
  • Emmis Communications performance (ROE) can't be compared to the US Media industry due to having negative earnings in 3 years.
  • Emmis Communications performance (ROE) is expected to become negative in 3 years.
X
Future performance checks
We assess Emmis Communications's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the US market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the US market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Emmis Communications has a total score of 0/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Emmis Communications performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Emmis Communications's growth in the last year to its industry (Media).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Emmis Communications's year on year growth rate is negative over the past 5 years, however the most recent earnings are above average.
  • Emmis Communications has been loss making last year but is now profitable.
  • Emmis Communications has become profitable in the last year making it difficult to compare the industry average.
Earnings and Revenue History
Emmis Communications's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Strong return on shareholders funds (ROE > 20%) last year.
  • Emmis Communications performed worse than the US Media industry average based on Return on Assets (ROA) last year.
  • Return based on revenue producing assets (ROCE) is negative or zero.
X
Past performance checks
We assess Emmis Communications's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Media industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Emmis Communications has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Emmis Communications's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Emmis Communications's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Emmis Communications is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Emmis Communications's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Emmis Communications's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Total debt is not covered by total short term assets, assets are 0.3x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
  • Emmis Communications's level of debt (214% of total debt) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has been reduced over the past 5 years (579% vs 213.6% today).
  • Total debt is not well covered by annual operating cash flow (less than 20% of total debt).
  • Interest on debt is not strongly covered by earnings (EBIT is 0.7x annual interest expense, ideally 3x coverage).
X
Financial health checks
We assess Emmis Communications's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by short term assets? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Emmis Communications has a total score of 2/6, see the detailed checks below.


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Emmis Communications's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from Emmis Communications dividends.
If you bought $2,000 of Emmis Communications shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Not paying a dividend.
  • Not paying a dividend.
Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
  • Not paying a notable dividend.
  • Not paying a notable dividend.
Current Payout to shareholders
What portion of Emmis Communications's earnings are paid to the shareholders as a dividend.
  • Not paying a notable dividend.
Future Payout to shareholders
  • Insufficient estimate data to determine if a dividend will be paid in 3 years.
X
Income/ dividend checks
We assess Emmis Communications's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
  2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
  3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  5. How sustainable is the dividend, can Emmis Communications afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. Emmis Communications has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Emmis Communications's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Jeff Smulyan, image provided by Google.
Jeff Smulyan
COMPENSATION $1,006,709
AGE 70
TENURE AS CEO 36.8 years
CEO Bio

Mr. Jeffrey H. Smulyan, also known as Jeff, J.D., serves as an Operating Partner at Catalyst Investors. Mr. Smulyan founded Emmis Communications Corporation in 1979 and has been its Executive Chairman and Chief Executive Officer since 1981. He serves as the President and Chief Executive Officer of Emmis Operating Company. He is an Industry Advisor at BIA Digital Partners LP. He began working in radio in 1973 and has owned one or more radio stations since then. He was the owner and Chief Executive Officer of the Seattle Mariners baseball team. He has been an Executive Director of Emmis Communications Corp. since 1979. He served as President at Emmis Communications Corp from 1994 to August 2015. Mr. Smulyan serves as the Chairman of Emmis Operating Company. He serves as a Member of the Advisory Board at BIA Digital Partners II, L.P. He served as a Director of Finish Line Inc. from June 1992 to July 17, 2008. He sits on the Board of Trustees of Ball State University. He serves as a Trustee of University of Southern California. He was Note and Comment Editor of the USC Law Review at USC School of Law. He was the Chairman of the Board of Directors of the Radio Advertising Bureau. Mr. Smulyan was a Director of the National Association of Broadcasters. In 2000, he was honored with the American Women in Radio and Television's Silver Satellite Award, the National Association of Broadcasters' National Radio Award and as Radio Ink's “Radio Executive of the Year“ by a radio industry group. Mr. Smulyan was voted one of the Ten Most Influential Radio Executives in the past 20 Years in a poll in Radio and Records magazine. Mr. Smulyan is a cum laude graduate of the University of Southern California with a BA in History and Telecommunications. He earned a Juris Doctor degree from USC School of Law.

CEO Compensation
  • Jeff's compensation has been consistent with company performance over the past year.
  • Jeff's compensation is higher than average for a company of this size and profit level.
Management Team Tenure

Average tenure and age of the Emmis Communications management team in years:

7.6
Average Tenure
54.6
Average Age
  • The average tenure for the Emmis Communications management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Jeff Smulyan

TITLE
Founder
COMPENSATION
$1M
AGE
70
TENURE
36.8 yrs

Pat Walsh

TITLE
President
COMPENSATION
$859K
AGE
50
TENURE
2.2 yrs

J. Enright

TITLE
Executive Vice President
COMPENSATION
$931K
AGE
54
TENURE
8.6 yrs

Ryan Hornaday

TITLE
Chief Financial Officer
COMPENSATION
$737K
AGE
43
TENURE
2.2 yrs

Traci Thomson

TITLE
Vice President of Human Resources

Charlie Morgan

TITLE
Senior Vice President and Market Manager of Emmis-New York
AGE
56
TENURE
1.2 yrs

Greg Loewen

TITLE
Chief Strategy Officer and President of Publishing Division
COMPENSATION
$678K
AGE
45
TENURE
7.6 yrs

Chuck Williams

TITLE
Senior Vice President and Market Manager of Emmis-Indianapolis - Indiana
TENURE
1.2 yrs

Angie Cook

TITLE
Senior Vice President of Emmis Digital
TENURE
0.7 yrs

Rick Cummings

TITLE
President of Radio Programming
COMPENSATION
$1M
AGE
64
TENURE
8.6 yrs
Board of Directors Tenure

Average tenure and age of the Emmis Communications board of directors in years:

21.6
Average Tenure
65.6
Average Age
  • The average tenure for the Emmis Communications board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors

Jeff Smulyan

TITLE
Founder
COMPENSATION
$1M
AGE
70
TENURE
36.8 yrs

Pat Walsh

TITLE
President
COMPENSATION
$859K
AGE
50

Susan Bayh

TITLE
Director
COMPENSATION
$96K
AGE
57
TENURE
23.8 yrs

Richard Leventhal

TITLE
Lead Director
COMPENSATION
$96K
AGE
70
TENURE
6.6 yrs

Peter Lund

TITLE
Independent Director
COMPENSATION
$96K
AGE
76
TENURE
15.8 yrs

Greg Nathanson

TITLE
Independent Director
COMPENSATION
$96K
AGE
70
TENURE
19.8 yrs

Gary Kaseff

TITLE
Director
COMPENSATION
$96K
AGE
69
TENURE
23.8 yrs

Larry Sorrel

TITLE
Independent Director
COMPENSATION
$96K
AGE
58
TENURE
24.8 yrs

James Dubin

TITLE
Director
COMPENSATION
$96K
AGE
70
Recent Insider Trading
  • Emmis Communications insiders have only sold shares in the past 3 months.
Who owns this company?
X
Management checks
We assess Emmis Communications's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Emmis Communications has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

Company News

Company Info

Map
Description

Emmis Communications Corporation, a diversified media company, engages in radio broadcasting activities in the United States. The company operates in three segments: Radio, Publishing, and Corporate & Emerging Technologies. It operates 16 FM and 3 AM radio stations in New York, Los Angeles, St. Louis, Austin, and Indianapolis, as well as publishes Indianapolis monthly magazine. The company also develops and licenses TagStation, a cloud-based software platform that allows a broadcaster to manage album art, meta data, and enhanced advertising on its various broadcasts; and develops NextRadio, a smartphone application that marries over-the-air FM radio broadcasts with visual and interactive features on smartphones. In addition, it provides Dial Report that offers radio advertising buyers and sellers big data analytics derived from radio station network, smartphone usage, location-based data, demographic profiling and listening data; and engages in dynamic pricing business. Emmis Communications Corporation was founded in 1981 and is based in Indianapolis, Indiana.

Details
Name: Emmis Communications Corporation
Ticker: EMMS
Exchange: NasdaqGS
Founded: 1981
Market Cap: $45,758,952
Shares outstanding: 12,710,820
Website: www.emmis.com
Address: Emmis Communications Corporation
One Emmis Plaza,
Suite 700,
Indianapolis,
Indiana, 46204,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS EMMS Class A Common Stock Nasdaq Global Select US USD 23. Feb 1994
DB EC21 Class A Common Stock Deutsche Boerse AG DE EUR 23. Feb 1994
Number of employees
Current staff
Staff numbers
685
Emmis Communications employees.
Industry
Industry: Broadcasting
Sector: Media