Nexstar Media Group (NasdaqGS:NXST) - Share price, News & Analysis

Q: What is the Fair Price of NXST when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

NXST ($164.34) is trading below our estimate of [[fair value]] ($817.99)

NXST fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	2/6
Financial Health	3/6
Dividends	3/6

NXST Stock Overview

Rewards

Trading at 79.9% below our estimate of its fair value

Earnings are forecast to grow 6.01% per year

Earnings have grown 28% per year over the past 5 years

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Significant insider selling over the past 3 months

Nexstar Media Group Competitors

TEGNA

NYSE:TGNA

US$4.7b

Fox

NasdaqGS:FOXA

US$17.6b

Sinclair Broadcast Group

NasdaqGS:SBGI

US$1.4b

Gray Television

NYSE:GTN

US$1.6b

Price History & Performance

Summary of all time highs, changes and price drops for Nexstar Media Group
Historical stock prices
Current Share Price	US$164.34
52 Week High	US$192.84
52 Week Low	US$135.87
Beta	1.53
1 Month Change	-7.00%
3 Month Change	-12.81%
1 Year Change	11.13%
3 Year Change	48.83%
5 Year Change	175.74%
Change since IPO	1,140.30%

Recent News & Updates

Jun 29

Nexstar Media nears deal for control of CW Network - WSJ

Nexstar Media Group (NASDAQ:NXST), the nation's No. 1 TV station owner, is closing in on a deal to acquire majority control of the CW Network from its co-owners, Warner Bros. Discovery (NASDAQ:WBD) and Paramount Global (NASDAQ:PARA) (NASDAQ:PARAA), The Wall Street Journal reports. The deal as discussed would have WBD and Paramount each holding on to a 12.5% stake while Nexstar acquires 75%, according to the report. Nexstar stock (NXST) is up 2.5% after hours.

Jun 01

Buy Superbly Managed, Growing Nexstar Media At 5x FCF Ahead Of Major New Business Initiative

Nexstar has an excellent track record of delivering for shareholders, increasing fully taxed FCF from $2/share in 2012 to ~$35/share today. The stock is up ~25x over that period. Despite this growth, Nexstar has been assigned a low "melting ice cube" multiple for more than a decade due to concerns over the cable ecosystem. Management has guided to FCF growth through 2027 in its legacy broadcast business. If that's true, the stock is substantially underpriced based on the legacy business alone. Nexstar is using its legacy spectrum to build a data "toll road", leasing connectivity to third parties. Revenue begins in 2024, ramping to half the current business by 2030. Management has a stellar track record and a superb reputation. If they deliver on what they have guided to, the stock is wildly underpriced.

Shareholder Returns

	NXST	US Media	US Market
7D	2.8%	1.8%	1.6%
1Y	11.1%	-33.9%	-20.8%

Return vs Industry: NXST exceeded the US Media industry which returned -33.6% over the past year.

Return vs Market: NXST exceeded the US Market which returned -20.4% over the past year.

Price Volatility

Is NXST's price volatile compared to industry and market?
NXST volatility
NXST Average Weekly Movement	5.2%
Media Industry Average Movement	8.5%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	3.2%

Stable Share Price: NXST is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: NXST's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1996	11,817	Perry Sook	https://www.nexstar.tv

Nexstar Media Group, Inc., a television broadcasting and digital media company, focuses on the acquisition, development, and operation of television stations and interactive community websites and digital media services in the United States. The company offers free programming to television viewing audiences. As of December 31, 2020, it provided sales, programming, and other services through various local service agreements to 37 power television stations owned by independent third parties; and owned, operated, programmed, or provided sales and other services to 198 television stations.

Nexstar Media Group Fundamentals Summary

How do Nexstar Media Group's earnings and revenue compare to its market cap?
NXST fundamental statistics
Market Cap	US$6.64b
Earnings (TTM)	US$885.27m
Revenue (TTM)	US$4.74b

7.5x

P/E Ratio

1.4x

P/S Ratio

Is NXST overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
NXST income statement (TTM)
Revenue	US$4.74b
Cost of Revenue	US$1.88b
Gross Profit	US$2.87b
Other Expenses	US$1.98b
Earnings	US$885.27m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	21.91
Gross Margin	60.47%
Net Profit Margin	18.66%
Debt/Equity Ratio	248.5%

How did NXST perform over the long term?

See historical performance and comparison

Dividends

2.2%

Current Dividend Yield

14%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is NXST undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for NXST?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for NXST. This is calculated by dividing NXST's market cap by their current preferred multiple.
What is NXST's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$6.64b

NXST key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.9x
Enterprise Value/EBITDA	7.8x
PEG Ratio	1.2x

Price to Earnings Ratio vs Peers

How does NXST's PE Ratio compare to its peers?

NXST PE Ratio vs Peers

The above table shows the PE ratio for NXST vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	13.1x
TGNA TEGNA	9.4x	8.0%	US$4.7b
FOXA Fox	15.8x	11.0%	US$17.6b
SBGI Sinclair Broadcast Group	0.6x	-96.2%	US$1.4b
GTN Gray Television	26.6x	4.5%	US$1.6b
NXST Nexstar Media Group	7.5x	6.0%	US$6.6b

Forward PE

Price-To-Earnings vs Peers: NXST is good value based on its Price-To-Earnings Ratio (7.5x) compared to the peer average (13.1x).

Price to Earnings Ratio vs Industry

How does NXST's PE Ratio compare vs other companies in the US Media Industry?

Price-To-Earnings vs Industry: NXST is good value based on its Price-To-Earnings Ratio (7.5x) compared to the US Media industry average (13x)

Price to Earnings Ratio vs Fair Ratio

What is NXST's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

NXST PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.5x
Fair PE Ratio	18.8x

Price-To-Earnings vs Fair Ratio: NXST is good value based on its Price-To-Earnings Ratio (7.5x) compared to the estimated Fair Price-To-Earnings Ratio (18.8x).

Share Price vs Fair Value

What is the Fair Price of NXST when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: NXST ($164.34) is trading below our estimate of fair value ($817.99)

Significantly Below Fair Value: NXST is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: NXST is poor value based on its PEG Ratio (1.2x)

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Future Growth

How is Nexstar Media Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

6.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: NXST's forecast earnings growth (6% per year) is above the savings rate (1.9%).

Earnings vs Market: NXST's earnings (6% per year) are forecast to grow slower than the US market (13.7% per year).

High Growth Earnings: NXST's earnings are forecast to grow, but not significantly.

Revenue vs Market: NXST's revenue (4% per year) is forecast to grow slower than the US market (8.3% per year).

High Growth Revenue: NXST's revenue (4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: NXST's Return on Equity is forecast to be high in 3 years time (24.6%)

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Past Performance

How has Nexstar Media Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

28.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: NXST has high quality earnings.

Growing Profit Margin: NXST's current net profit margins (18.7%) are lower than last year (18.9%).

Past Earnings Growth Analysis

Earnings Trend: NXST's earnings have grown significantly by 28% per year over the past 5 years.

Accelerating Growth: NXST's earnings growth over the past year (3.5%) is below its 5-year average (28% per year).

Earnings vs Industry: NXST earnings growth over the past year (3.5%) underperformed the Media industry 18.8%.

Return on Equity

High ROE: Whilst NXST's Return on Equity (30.21%) is high, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is Nexstar Media Group's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: NXST's short term assets ($1.5B) exceed its short term liabilities ($733.5M).

Long Term Liabilities: NXST's short term assets ($1.5B) do not cover its long term liabilities ($9.4B).

Debt to Equity History and Analysis

Debt Level: NXST's net debt to equity ratio (237.3%) is considered high.

Reducing Debt: NXST's debt to equity ratio has reduced from 368.7% to 248.5% over the past 5 years.

Debt Coverage: NXST's debt is not well covered by operating cash flow (17.7%).

Interest Coverage: NXST's interest payments on its debt are well covered by EBIT (4.7x coverage).

Balance Sheet

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Dividend

What is Nexstar Media Group current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.19%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: NXST's dividend (2.19%) is higher than the bottom 25% of dividend payers in the US market (1.59%).

High Dividend: NXST's dividend (2.19%) is low compared to the top 25% of dividend payers in the US market (4.25%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, NXST has been paying a dividend for less than 10 years.

Growing Dividend: NXST's dividend payments have increased, but the company has only paid a dividend for 9 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (14.1%), NXST's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (12.8%), NXST's dividend payments are thoroughly covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average management tenure

CEO

Perry Sook (63 yo)

26.42yrs

Tenure

US$21,145,853

Compensation

Mr. Perry A. Sook founded Nexstar Media Group, Inc. (“Nexstar”) in 1996 and has been its Chairman, Chief Executive Officer and Director since its inception in 1996 and served as its President since 1996 un...

CEO Compensation Analysis

Compensation vs Market: Perry's total compensation ($USD21.15M) is above average for companies of similar size in the US market ($USD8.21M).

Compensation vs Earnings: Perry's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: NXST's management team is considered experienced (4.8 years average tenure).

Board Members

Experienced Board: NXST's board of directors are seasoned and experienced ( 12.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: NXST insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/29 00:00
End of Day Share Price	2022/06/29 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31