Nexstar Broadcasting Group Inc (NXST)

Nexstar Broadcasting Group Inc (NXST): A Comprehensive Overview

Company Profile:

Detailed history and background:

• Founded in 1996 as Nexstar Broadcasting Group Inc.
• Focused initially on acquiring television stations across the US.
• Became publicly traded in 1997 (NASDAQ: NXST)
• Grew through strategic acquisitions and mergers, including Media General (2017), Tribune Media (2019) and Mission Broadcasting (2021)
• Currently boasts the largest portfolio of television stations in the US.

Description of the company’s core business areas:

• Owns and operates 208 local television stations in 116 markets across the US, reaching approximately 39% of US television households.
• Stations include ABC, CBS, FOX, NBC, MyNetworkTV, CW and independent affiliates.
• Generates revenue through:
  • Advertising on television stations.
  • Retransmission fees from cable and satellite operators.
  • Digital media and streaming businesses.

Overview of the company’s leadership team and corporate structure:

• Perry A. Sook, Chairman & President.
• Thomas M. Carter, Chief Executive Officer.
• Brian K. Jones, Executive Vice President & CFO.
• Robin L. Flynn , Executive Vice President & General Sales Manager.
• Board of Directors includes experienced professionals from media and finance industries.

Top Products and Market Share:

Top Products:

• Local news, weather, sports and entertainment broadcasting.
• National and regional advertising on local television stations.
• Digital streaming services - NewsNationNow, local websites, mobile apps.

Market Share:

• Leading U.S. television broadcaster with largest station footprint.
• Reaches 39% of U.S. households.
• Holds #1 spot in 90 markets and top-3 position in 86.

Product performance and market reception:

• NewsNation cable and streaming channel gaining traction with national audience.
• Strong digital presence with 112 million monthly unique visitors and 83.4 million video streams.
• Acquisition of digital content platform, Wpromote, strengthens digital marketing offerings.

Total Addressable Market:

• U.S. television advertising market estimated at $76.5 billion in 2022.
• Growing digital advertising market provides additional opportunities.

Financial Performance:

2022 Financial Highlights:

• Revenue: $4.76 billion
• Net income: $777.4 million
• Earnings per share: $4.86
• Strong cash flow and healthy balance sheet.

Year-over-year comparison:

• Revenue increased 14.5% from 2021.
• Net income increased 28.3% from 2021.
• Earnings per share increased 28.3% from 2021.

Dividends and Shareholder Returns:

Dividend History:

• Regular quarterly cash dividends paid since becoming public.
• Recent annualized dividend yield: 2.5%.
• Payout ratio approximately 50% of free cash flow.

Shareholder Returns:

• 5-year total shareholder return (including dividends): 71.5%.
• 10-year total shareholder return (including dividends): 406%.

Growth Trajectory:

Historical Growth:

• Revenue has grown approximately 15% annually over the past 5 years.
• Company expects continued growth through acquisitions, expanding digital offerings, and audience expansion.
• Recently launched NewsNation OTT service and acquired digital agency Wpromote to drive further digital revenue growth.
• Increased investments in content and technology are expected to bolster audience engagement and market position.

Market Dynamics:

Industry Trends:

• Consolidation in media industry driving larger companies with greater scale and reach.
• Shift in viewership towards streaming and digital platforms, posing both opportunities and challenges.
• New technologies like addressable advertising offer targeted reach and enhance viewer experience.

Nexstar’s Positioning:

• Well-positioned to benefit from continued consolidation and audience shift.
• Diversification into digital and streaming provides additional revenue streams.
• Strong local and national broadcasting footprint offers unique value to advertisers.
• Investments in technology and content creation position the company for continued growth.

Competitors:

Key competitors:

• E.W. Scripps (SSP)
• Gray Television (GTN)
• Tegna (TGNA)
• Sinclair Broadcast Group (SBGI)

Competitive Advantages:

• Leading market share and station coverage.
• National reach through NewsNation and digital platforms.
• Strong track record of acquisitions and post-merger integration.

Potential Challenges and Opportunities:

• Regulatory changes impacting media ownership.
• Increased competition from technology giants in streaming and advertising.
• Economic downturn could impact advertising spending.

Opportunities:

• Continued expansion of digital offerings and streaming services.
• Potential for further consolidation in a fragmented industry.
• Development and adoption of new advertising technologies.
• Continued expansion of NewsNation and national footprint.

Recent Acquisitions:

**Year	Company Name	Acquisition Price (Billions)	Explanation**
2021	Mission Broadcasting	0.6
2021	Wpromote	0.15
2023	KSN Media	1

• Mission Broadcasting: Expanded the company’s presence in smaller markets and strengthened national programming capabilities.
• Wpromote: Enhanced digital advertising and marketing offerings, diversifying revenue streams.
• KSN Media: Strategic move into production and content creation, bolstering programming and viewer engagement.

AI-Based Fundamental Rating:

Rating: 8.5/10

Justification:

• Strengths: Leading market position, strong financials, growth trajectory, diversified business model, strong and experienced management team.
• Weaknesses: Regulatory risks, changing media consumption habits, potential economic downturn.
• Overall: Nexstar Broadcasting Group Inc. is a well-positioned company with a strong future outlook.

Sources and Disclaimers:

• Information gathered from Nexstar Broadcasting Group Inc.’s website, SEC filings, financial news sources, industry reports, and competitor websites.
• This information is for informational purposes only and does not constitute financial advice. Please consult with a financial advisor before making investment decisions.