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Gray Television (GTN)
NYSE:GTN
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Gray Television
(NYSE:GTN)
Rating:67Neutral
Price Target:
$4.50
▲( 17.49% Upside)
Positive Factors
Debt Management
The company is continuing to make progress on its debt load and save on interest expense, having reduced debt outstanding by $520 million in 2024.
Financial Performance
First quarter revenues of $782 million were ahead of the $772 million estimate, with political advertising providing less of a headwind than expected.
Market Position
Gray's dominance in its local markets and excellent cost controls position it well within its sector and enable industry-leading shares of political dollars.
Negative Factors
Cost Challenges
Several challenging trends include continuing linear churn, a slowing pace of progress in retransmission revenue generation and still-high programming costs obligations.
Profitability
The softness in the company’s guidance was more substantial than expected, suggesting a lower level of profitability in the first quarter.
Revenue Expectations
The company’s guidance reflects the uncertain outlook, with expectations of a mid-single-digit advertising decline.
Gray Television (GTN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$448.29M
Dividend Yield7.94%
Average Volume (3M)1.40M
Price to Earnings (P/E)1.7
Beta (1Y)0.54
Revenue Growth9.08%
EPS GrowthN/A
CountryUS
Employees9,118
SectorCommunication Services
Sector Strength81
IndustryBroadcasting
Share Statistics
EPS (TTM)-0.23
Shares Outstanding92,207,010
10 Day Avg. Volume1,530,288
30 Day Avg. Volume1,402,466
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)0.14
Price to Sales (P/S)0.00
P/FCF Ratio0.76
Enterprise Value/Market Cap13.43
Enterprise Value/Revenue0.44
Enterprise Value/Gross Profit3.46
Enterprise Value/Ebitda1.48
Forecast
1Y Price Target
$5.88Price Target Upside53.52% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Gray Television Business Overview & Revenue Model
Company DescriptionGray Television, Inc., a television broadcasting company, owns and/or operates television stations and digital assets in the United States. It also broadcasts secondary digital channels affiliated to ABC, CBS, NBC, and FOX, as well as various other networks and program services, including CW Plus Network, MY Network, the MeTV Network, Justice, This TV Network, Antenna TV, Telemundo, Cozi, Heroes and Icons, and MOVIES! Network; and local news/weather channels in various markets. In addition, the company offers video program production services. It owns and operates television stations and digital assets that serve 113 television markets in the United States. The company was formerly known as Gray Communications Systems, Inc. and changed its name to Gray Television, Inc. in August 2002. Gray Television, Inc. was founded in 1891 and is headquartered in Atlanta, Georgia.
How the Company Makes MoneyGray Television generates revenue primarily through advertising sales, retransmission consent fees, and production services. Advertising sales constitute the largest portion of its revenue, driven by the broadcast of commercials during local and network programming on its television stations. The company also earns significant income through retransmission consent agreements with cable and satellite providers, which pay Gray Television for the right to carry its broadcast content. Additionally, the company offers production services and content creation for third parties, further diversifying its revenue streams. Partnerships with major network affiliates enhance its programming capabilities, attracting both viewers and advertisers, which in turn boosts its revenue potential.
Gray Television Financial Statement Overview
Summary
Gray Television demonstrates strong operational performance with improving profit margins and revenue growth. However, its high leverage and capital allocation risks warrant caution. Strong free cash flow growth and cash conversion rates are positive indicators of financial health, yet careful management of debt levels and strategic investments are crucial for sustained performance.Income Statement
Gray Television shows a strong gross profit margin of 96.56% in 2024, indicating efficient cost management. However, net profit margin improved to 10.29% from a negative margin in 2023, reflecting a recovery in profitability. Revenue growth rate from 2023 to 2024 was 11.07%, which is positive but somewhat volatile given past fluctuations. EBIT and EBITDA margins in 2024 are robust at 23.36%, showing strong core operational performance.70
Positive
Balance Sheet
The company has a high debt-to-equity ratio of 0.04 in 2024, indicating significant leverage which may pose financial risk. Return on equity for 2024 stands at 16.42%, which is a healthy return for shareholders. However, the unavailability of total assets data limits the analysis of equity ratio, which could provide further insight into financial stability.55
Neutral
Cash Flow
Gray Television's free cash flow exhibited strong growth of 102.67% in 2024, enhancing financial flexibility. The operating cash flow to net income ratio is 2.00, showing strong cash generation relative to reported earnings. Free cash flow to net income ratio is high at 1.62, indicating efficient conversion of earnings into cash. However, high investing and financing cash flow outflows highlight potential risks in capital allocation.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.64B | 3.28B | 3.68B | 2.41B | 2.38B | Gross Profit |
| 1.24B | 898.00M | 1.43B | 803.00M | 989.00M | EBIT |
| 851.00M | 383.00M | 990.00M | 381.00M | 752.00M | EBITDA |
| 1.25B | 697.00M | 1.33B | 594.00M | 936.00M | Net Income Common Stockholders |
| 375.00M | -76.00M | 455.00M | 90.00M | 410.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 135.00M | 21.00M | 61.00M | 189.00M | 773.00M | Total Assets |
| 10.68B | 10.64B | 11.15B | 11.11B | 7.64B | Total Debt |
| 5.69B | 6.24B | 6.53B | 6.83B | 4.03B | Net Debt |
| 5.56B | 6.22B | 6.47B | 6.64B | 3.26B | Total Liabilities |
| 7.61B | 8.02B | 8.39B | 8.70B | 5.24B | Stockholders Equity |
| 2.93B | 2.62B | 2.77B | 2.41B | 2.40B |
| Cash Flow | Free Cash Flow | |||
| 608.00M | 300.00M | 393.00M | 93.00M | 542.00M | Operating Cash Flow |
| 751.00M | 648.00M | 829.00M | 300.00M | 652.00M | Investing Cash Flow |
| -28.00M | -291.00M | -503.00M | -3.53B | -211.00M | Financing Cash Flow |
| -609.00M | -397.00M | -454.00M | 2.65B | 120.00M |
Gray Television Technical Analysis
Negative
3.83
Price Trends
3.98
Negative
3.79
Positive
4.20
Negative
Market Momentum
0.09
Positive
48.02
Neutral
13.71
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GTN, the sentiment is Negative. The current price of 3.83 is below the 20-day moving average (MA) of 3.88, below the 50-day MA of 3.98, and below the 200-day MA of 4.20, indicating a bearish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 48.02 is Neutral, neither overbought nor oversold. The STOCH value of 13.71 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GTN.
Gray Television Risk Analysis
Gray Television disclosed 29 risk factors in its most recent earnings report. Gray Television reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Gray Television Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $2.78B | 6.08 | 16.07% | 2.89% | 6.34% | -0.26% | |
67 Neutral | $448.29M | 1.74 | 9.92% | 7.94% | 9.08% | ― | |
67 Neutral | $81.04M | 22.57 | 2.06% | 8.30% | -1.65% | -51.45% | |
66 Neutral | $199.98M | 2.23 | 11.23% | ― | 6.28% | ― | |
60 Neutral | $14.06B | 6.51 | -3.76% | 3.69% | 2.48% | -35.40% | |
50 Neutral | $171.04M | ― | -82.15% | 10.64% | -66.94% | -52.19% | |
35 Underperform | $15.01M | ― | -243.54% | ― | -2.92% | -165.37% |
* Communication Services Sector Average
Performance Comparison
GTN
Gray Television
3.83
-1.74
-31.24%
CMLS
Cumulus Media
0.15
-2.63
-94.60%
SSP
E. W. Scripps Company Class A
2.06
-0.85
-29.21%
EVC
Entravision
1.90
0.00
0.00%
SGA
Saga Communications
12.15
-5.83
-32.42%
TGNA
TEGNA
16.74
2.77
19.83%
Gray Television Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 2.96%|
Next Earnings Date:Aug 01, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While the company exceeded guidance on revenue and expenses, achieved significant political ad revenue, and made progress in debt reduction and local content expansion, it also faced challenges with revenue and EBITDA declines from the previous year, and uncertainty in core advertising due to macroeconomic factors.Q1-2025 Updates
Positive Updates
Revenue and Expense Management
Total revenue for Q1 2025 was $782 million, which is 1% above the high end of the guidance. Operating expenses were 1% below the low end of previously announced guidance.
Political Advertising Revenue
Political ad revenue significantly exceeded expectations, reaching $13 million, well above the $2 million to $4 million guidance.
Debt Reduction and Financial Strategy
Reduced outstanding indebtedness by $17 million and improved the leverage ratio. Increased accounts receivable securitization facility by $100 million.
Local Sports and Content Expansion
Entered into new sports rights agreements, covering nearly 80% of markets, enhancing local content offerings.
Industry Recognition and Awards
Stations and personnel received national recognition, including Emmy nominations and the Service to America Award.
Assembly Studios Progress
Strong ratings for new productions like 'Beyond the Gates,' with continued interest from high-profile movie and streaming productions.
Negative Updates
Revenue Decline from Previous Year
Total revenue decreased by 5% from Q1 2024, and net loss was $9 million compared to net income of $88 million in Q1 2024.
Adjusted EBITDA Decrease
Adjusted EBITDA was $160 million, a decrease of 19% compared to Q1 2024.
Core Advertising Revenue Decline
Core advertising revenue was down 8% compared to Q1 2024 due to factors like reduced automotive spending.
Challenges from Macroeconomic Conditions
Uncertain macroeconomic conditions and high interest rates impacted advertiser confidence, particularly in automotive and consumer discretionary categories.
Company Guidance
During the Gray Media Q1 2025 earnings call, CEO Hilton Howell announced that the company's results exceeded guidance on both revenues and expenses. Total revenue for Q1 2025 was $782 million, a 5% decrease from Q1 2024, but 1% above the high end of their guidance. Operating expenses were 1% below the low end of guidance. Despite a net loss of $9 million compared to a net income of $88 million in Q1 2024, the adjusted EBITDA was $160 million, marking a 19% decline. Gray Media continued deleveraging by reducing indebtedness by $17 million, finishing the quarter with a lower leverage ratio. The company extended its accounts receivable securitization facility and increased its revolver size, enhancing liquidity. Moreover, political ad revenue exceeded expectations at $13 million, significantly higher than the guided range of $2 million to $4 million. Gray Media's strategic focus on local content and sports broadcasting, along with various awards and recognitions, underscores its commitment to maintaining relevance and value in its markets.Gray Television Corporate Events
Executive/Board ChangesShareholder Meetings
Gray Television Approves Equity Plan Amendments at Shareholder Meeting
Neutral
May 7, 2025
On May 7, 2025, Gray Television, Inc. held its Annual Meeting of Shareholders, where the amendment and restatement of the 2022 Equity and Incentive Compensation Plan were approved. This decision increases the number of shares reserved for issuance and extends the plan’s termination date, potentially impacting the company’s equity structure and stakeholder interests. Additionally, the meeting included the election of directors and the ratification of RSM US LLP as the independent registered public accounting firm for 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.