“Our fourth quarter financial results mark a strong finish to another successful year for Nexstar in which we delivered $5.4 billion in total net revenue — the highest in our company’s 28-year history,” Nexstar Media Group founder and Chairman/CEO Perry A. Sook said as he opened the company’s Q4 2024 earnings call on Thursday.
Was he downplaying Nexstar’s fiscal health? In late trading, “NXST” was up by nearly 12.5% from Wednesday’s closing price, marking a sharp rebound for the broadcast media industry’s best-performing stock.
Perhaps the answer is “yes.” In Q4, Nexstar saw its net revenue improve to $1.49 billion from $1.3 billion, moving past the consensus estimate of $1.48 billion based on six analysts’ projections supplied to Yahoo! Finance.
With operating expenses statistically flat at $1.072 billion, the company saw its net income finish at $241 million ($7.56 per diluted share). That’s up from $115 million ($3.32) in Q4 2023, but fell short of the $8.06 EPS estimate offered.
Nevertheless, investors were gleeful, snapping up shares in the owner of broadcast TV stations and WGN Radio, as well as serving as the controlling interest holder in The CW Network.
Adjusted EBITDA came in at $628 million, up from $449 million, as strong political-year election advertising added $254 million to Nexstar’s coffers. This offset a $51 million year-over-year reduction in non-political advertising revenue due to advertising market softness and political displacement.
Adjusted Free Cash Flow in Q4 increased to $411 million, rising from $245 million.
With total debt at $6.52 billion, down from $6.84 billion at the close of 2023, reducing it remains a core concern for Nexstar and its creditors. What lies ahead for Nexstar?
“We are providing guidance for fiscal 2025 Adjusted EBITDA in a range of $1.5 billion to $1.595 billion,” the company said, declining to provide Q1 2025 guidance.
At present, 11 analysts rate Nexstar as a “Strong Buy,” while six others have a “Buy” rating. Four analysts have a “Hold” rating. Given that optimism, a year-end target price of $192.92 is in place.
Could Nexstar shares again top $200? That’s possible, if mergers and acquisitions transpire with a thawing of FCC ownership rules. The possibilities are “palpable,” Sook said on the earnings call. He noted that he’s been working with the NAB on regulatory policy shifts that would favor broadcasters in an environment where “Big Tech” has gobbled up ad-dollars in an unregulated way.
