Investment Thesis
Nexstar faces structural headwinds from secular industry decline, evidenced by 8.5% YoY revenue contraction in broadcast television. Despite strong free cash flow ($267M), excessive leverage (5.61x Debt/Equity) with marginal interest coverage (2.3x) creates material financial distress risk. The 86% EPS collapse despite net income growth signals severe shareholder dilution and deteriorating capital structure.
Strengths
- Strong free cash flow generation of $267M (19.1% margin) provides debt service capacity
- Solid operating margins of 19% demonstrate operational efficiency in assets
- Adequate liquidity with 1.76x current ratio
Risks
- Revenue declining 8.5% YoY reflects secular cord-cutting and digital disruption pressures in broadcast television
- Dangerously high leverage (5.61x Debt/Equity) with low interest coverage (2.3x) creates refinancing and debt spiral risk
- Massive EPS dilution (down 86% YoY) despite 10.8% net income growth indicates severe share dilution and capital structure stress
Key Metrics to Watch
- Quarterly revenue trajectory and stabilization of advertising base
- Debt/Equity ratio and net debt reduction capability from FCF
- Interest coverage maintenance and debt refinancing terms
Financial Metrics
Revenue
1.4B
Net Income
164.0M
EPS (Diluted)
$5.09
Free Cash Flow
267.0M
Total Assets
18.1B
Cash
379.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
19.0%
Net Margin
11.7%
ROE
7.6%
ROA
0.9%
FCF Margin
19.1%
Balance Sheet & Liquidity
Current Ratio
1.76x
Quick Ratio
1.76x
Debt/Equity
5.61x
Debt/Assets
88.0%
Interest Coverage
2.26x
Long-term Debt
12.2B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-09T12:11:44.069469 |
Data as of: 2026-03-31 |
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