Tegna Inc (TGNA)

Tegna Inc. Company Overview

Company Profile:

History and Background: Tegna Inc. is a media and entertainment company born from the 2015 spin-off of broadcasting assets from Gannett Co., Inc. With a rich history dating back to 1883, Tegna boasts a portfolio of 64 television stations across 51 markets reaching approximately 39% of US TV households.

Core Business Areas: Tegna's key business areas include:

• Broadcast Television: Owning and operating television stations affiliated with major networks like ABC, CBS, NBC, FOX, and CW.
• Digital Media: Operating digital platforms and providing local news, information, and entertainment content online.
• Marketing Services: Offering data-driven marketing solutions to help businesses connect with local audiences.

Leadership and Corporate Structure: Tegna's leadership team comprises industry veterans with extensive experience in media and technology. The current Chief Executive Officer is Dave Lougee, who has spearheaded numerous initiatives to strengthen the company's digital presence and revenue diversification.

Top Products and Market Share:

• Tegna Stations: The company's primary product is its collection of local television stations, holding leading positions in several major markets. It boasts the top-rated NBC affiliate in eight of the top 25 designated market areas (DMAs).
• News Websites and Apps: Tegna operates websites and mobile apps associated with its stations, reaching millions of users monthly for localized news and information.

Market Share: Tegna holds a 13% market share in the US local television broadcasting industry in terms of revenue. It faces competition from other major station groups like Gray Television and Nexstar Media Group. While the company's total number of stations is smaller than some competitors, it strategically focuses on large and profitable markets.

Total Addressable Market: The total addressable market for local television broadcasting in the US is estimated to be around $20 billion. It includes advertising revenue from national and local campaigns, as well as retransmission fees from cable and satellite providers.

Financial Performance:

• Revenue: Tegna generated $940.9 million in total revenue for the second quarter of 2023, indicating a 6% drop compared to the same period in 2022.
• Net Income: The company reported a net income of $76.5 million for the second quarter of 2023, a decrease from $106.5 million in the comparable quarter of 2022.
• Profit Margins: The company's operating margin stood at 19.7% for the second quarter of 2023, maintaining relative stability compared to the previous year.
• Earnings per Share (EPS): Tegna's diluted EPS for the second quarter of 2023 was $0.40, lower than the $0.56 reported for the same period in 2022.

Dividends and Shareholder Returns:

• Dividend History: Tegna has a relatively recent dividend history, initiating payouts in 2016. The latest annual dividend stood at $1.28 per share, with a payout ratio of approximately 28%.
• Shareholder Returns: Tegna stock (NYSE: TGNA) has delivered total shareholder returns of -8% over the past year, -9% over the past 5 years, and -28% over the past 10 years.

Growth Trajectory:

• Historical Growth: Tegna experienced modest growth in revenue and operating margins over the past 5 years before facing declining trends in 2023.
• Future Growth Projections: The company's future growth will likely depend on its success in navigating challenges posed by cord-cutting and increasing competition in the digital advertising space. Tegna recently completed the sale of its advertising platform Premion, marking a strategic shift.

Market Dynamics: The broadcasting industry faces ongoing challenges as viewers migrate to online streaming platforms. To adapt, Tegna is focusing on strategies like local news content development, digital platform integration, and data-driven marketing solutions.

Competitors:

• Gray Television (NYSE: GTN): A leading station group with over 200 stations, holding a 14% market share.
• Nexstar Media Group (NASDAQ: NXST): The largest station group with over 200 stations, capturing about 17% of the market share.
• E.W. Scripps Company (NASDAQ: SSP): A broadcast group with over 61 stations, commanding roughly 9% of the market share.

Challenges and Opportunities:

Key Challenges:

• Declining viewership: The shift from traditional broadcasting to digital streaming platforms necessitates adaptation strategies such as strengthening online news content and investing in digital platforms.
• Competition: Navigating competition from major station groups like Gray Television and Nexstar Media Group within a consolidating industry, further impacted by digital giants entering the local news space, remains crucial.

Key Opportunities:

• Local news focus: Capitalizing on the enduring demand for local news content by leveraging strong local stations and developing engaging digital experiences presents a significant growth avenue.
• Data-driven marketing: Investing in data-driven marketing solutions for local businesses allows Tegna to tap into the growing digital advertising arena and diversify revenue streams.

Recent Acquisitions (last 3 years):

• Premion (July 2022): Tegna acquired Premion, a leading data-driven marketing software platform, to expand its digital advertising offerings to local businesses. However, in August 2023, Tegna sold all its interests in Premion. This shift might signal a refocusing of investment strategies.
• Curative Media Inc. (November 2020): Tegna acquired Curative Media, specializing in over-the-top television solutions, to strengthen its streaming capabilities and reach broader audiences.

AI-Based Fundamental Rating:

Based on an AI-powered analysis of fundamental factors, Tegna might fall within a rating range of 5-6 out of 10. While financial indicators currently show stability, growth prospects appear less pronounced compared to some major competitors. The company's strategic direction will likely influence its future rating trajectory.

Please note: This overview presents a snapshot based on available data as of October 27, 2023. Please acknowledge that market conditions and company performance can change rapidly.

Sources and Disclaimers:

• Tegna Inc. Investor Relations Website: https://investors.tegna.com/
• Securities and Exchange Commission (SEC) Filings: https://www.sec.gov/edgar/search/
• Statista: https://www.statista.com/topics/2346/television-broadcasting-in-the-us/
• Other relevant news articles and industry reports

This information should not be considered financial advice. Please conduct your own due diligence before making any investment decisions.