Nexstar Media Group Inc (NXST, Financial) has experienced a notable fluctuation in its stock price over recent periods. With a current market capitalization of $5.5 billion, the stock is trading at $164.44. Over the past week, NXST has seen a 3.06% loss, yet this short-term dip contrasts with a significant 11.83% gain over the past three months. According to the GF Value, the stock is currently modestly undervalued at a GF Value of $208.76, up from a past GF Value of $205.21. This valuation suggests that NXST may have room for growth, maintaining its status as modestly undervalued both currently and in the past three months.
Introduction to Nexstar Media Group Inc
Nexstar Media Group Inc, a titan in the Media - Diversified industry, stands as the largest television station owner-operator in the United States. The company's expansive portfolio includes over 200 stations across 116 markets, with a significant number affiliated with major national broadcast networks. The 2019 merger with Tribune catapulted Nexstar to the forefront as a top broadcast affiliate for Fox and CBS, and a leading partner for NBC and ABC. Reaching 68% of US TV households, Nexstar also owns assets like NewsNation, a majority stake in The CW, and a substantial share in Food Network and Cooking Channel. This broad reach and diversified holdings underscore the company's robust position in the media landscape.
Assessing Nexstar's Profitability
Nexstar's financial health is reflected in its impressive Profitability Rank of 9/10, indicating a strong likelihood of continued profitable operations. The company's Operating Margin stands at 14.70%, surpassing 83.32% of 1,043 companies in the industry. Its ROE at 13.80% and ROA at 2.81% also outperform a majority of its peers, while the ROIC of 4.24% is better than 60.51% of companies. Notably, Nexstar has maintained profitability for the past decade, a testament to its enduring business model and operational efficiency.
Growth Trajectory of Nexstar Media Group
The company's Growth Rank is a perfect 10/10, reflecting its exceptional growth in revenue and profitability. Nexstar's 3-Year Revenue Growth Rate per Share of 12.60% and 5-Year Rate of 20.50% outshine a vast majority of its competitors. However, the Total Revenue Growth Rate estimate for the next 3 to 5 years is a modest 0.78%. The 3-Year EPS without NRI Growth Rate shows a decline of 17.00%, but the 5-Year EPS Growth Rate is a robust 19.20%, with future estimates projecting a strong 17.95% growth. These figures highlight Nexstar's ability to expand and adapt in a dynamic industry.
Notable Shareholders in Nexstar Media Group
Among the notable shareholders of Nexstar, Steven Cohen (Trades, Portfolio) leads with a 1.33% stake, holding 450,351 shares. Mario Gabelli (Trades, Portfolio) follows with 84,434 shares, representing a 0.25% share, and Ray Dalio (Trades, Portfolio) holds 58,567 shares, accounting for 0.17% of the company. These prominent investors' stakes in NXST underscore their confidence in the company's future prospects and strategic direction.
Competitive Landscape
When compared to its competitors, Nexstar's market capitalization of $5.5 billion positions it within a competitive range. Madison Square Garden Sports Corp (MSG) has a market cap of $4.47 billion, while TKO Group Holdings Inc (TKO, Financial) and Endeavor Group Holdings Inc (EDR, Financial) have market caps of $6.64 billion and $7.4 billion, respectively. This places Nexstar squarely in the midst of its industry peers, suggesting a balanced competitive stance in the market.
Conclusion
In summary, Nexstar Media Group Inc's stock performance and valuation indicate a company that is modestly undervalued with potential for growth. The company's dominant market position and diversified business model, combined with its strong profitability and growth metrics, make it an attractive option for investors. The presence of high-profile shareholders further validates the company's market appeal. When juxtaposed with its competitors, Nexstar's market capitalization reflects its solid standing within the industry. As such, NXST presents a compelling case for value investors looking for a stable yet growing media investment.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
