Gray Media, Inc (NYSE: GTN)

Sector: Communication Services Industry: Broadcasting CIK: 0000043196
Market Cap 232.70 Mn
P/B 2.15
P/E -7.34
P/S 0.80
ROIC (Qtr) 2.74
Div Yield % 1.68
Rev 1y % (Qtr) -21.16
Total Debt (Qtr) 5.68 Bn
Debt/Equity (Qtr) 2.63
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About

Gray Television Inc., with ticker symbol GTN, is a leading player in the media industry, specializing in the ownership and operation of top-rated local television stations and digital assets across the United States. Its television stations serve 113 television markets, reaching approximately 36 percent of US television households. Gray Television's portfolio includes 79 markets with the top-rated television station and 102 markets with the first and/or second highest rated television station. The company generates revenue primarily from broadcast...

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Investment thesis

Bull case

  • Healthy cash reserves of 182M provide 15.17x coverage of short-term debt 12M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 545M provides strong 24.77x coverage of stock compensation 22M, indicating sustainable incentive practices.
  • Robust free cash flow of 440M exceeds capital expenditure of 105M by 4.19x, indicating strong organic growth funding capability.
  • Tangible assets of 2.19B provide exceptional 78.18x coverage of deferred revenue 28M, showing strong service capability backing.
  • Strong operating cash flow of 545M provides 5x coverage of SG&A expenses 109M, showing efficient operational cost management.

Bear case

  • Operating cash flow of 545M barely covers its investment activities of (72M), with a coverage ratio of -7.57, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 545M provides thin coverage of dividend payments of (32M) with a -17.03 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 182M provide limited coverage of acquisition spending of (12M), which is -15.17x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating earnings of 606M show weak coverage of depreciation charges of 246M, with a 2.46 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 440M represents just -1.80x of debt issuance (245M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Broadcasting
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NXST Nexstar Media Group, Inc. 8.26 Bn 23.87 1.67 6.40 Bn
2 TGNA Tegna Inc 4.06 Bn 7.22 1.41 2.59 Bn
3 SBGI Sinclair, Inc. 1.07 Bn 0.49 0.18 4.24 Bn
4 SSP E.W. SCRIPPS Co 0.81 Bn -7.98 0.35 2.74 Bn
5 IHRT iHeartMedia, Inc. 0.53 Bn -1.32 0.14 5.87 Bn
6 FUBO FuboTV Inc. 0.46 Bn 2.96 0.17 0.41 Bn
7 GTN Gray Media, Inc 0.23 Bn -7.34 0.80 5.68 Bn
8 NMAX Newsmax Inc. 0.20 Bn -2.81 1.18 0.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.10 0.87
EV to Cash from Ops. EV/CFO 31.05 -0.15
EV to Debt EV to Debt 0.18 6.39
EV to EBIT EV/EBIT 17.06 3.66
EV to EBITDA EV/EBITDA 10.98 3.24
EV to Free Cash Flow [EV/FCF] EV/FCF 53.60 7.40
EV to Market Cap EV to Market Cap 4.34 6.46
EV to Revenue EV/Rev 3.48 1.70
Price to Book Value [P/B] P/B 2.15 614.59
Price to Earnings [P/E] P/E -7.34 -1.43
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.50 -21.94
Dividend Payout Ratio % Div Payout % (Qtr) 69.60 114.41
Dividend per Basic Share Div per Share (Qtr) 0.32 0.74
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 7.05 23.53
Interest Coverage Int. cover (Qtr) 1.27 -1.29
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 35.58 19.60
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 163.77 18.99
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 17.54
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -20.35 546.44
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -8.63 -17.28
EBIT Growth (1y) % EBIT 1y % (Qtr) -18.44 266.27
EBT Growth (1y) % EBT 1y % (Qtr) -51.14 -496.56
EPS Growth (1y) % EPS 1y % (Qtr) -69.74 -40.46
FCF Growth (1y) % FCF 1y % (Qtr) 45.21 25.60
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -7.20 3.01
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.32 0.48
Cash Payout Ratio Cash Payout (Qtr) 0.05 0.20
Cash Ratio Cash Ratio (Qtr) 0.35 0.41
Current Ratio Curr Ratio (Qtr) 0.93 1.64
Debt to Equity Ratio Debt/Equity (Qtr) 2.63 2.17
Interest Cover Ratio Int Coverage (Qtr) 1.27 -1.29
Times Interest Earned Times Interest Earned (Qtr) 1.27 -1.29
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 25.40 -11.99
EBIT Margin % EBIT Margin % (Qtr) 18.10 -20.47
EBT Margin % EBT Margin % (Qtr) 3.85 -27.40
Gross Margin % Gross Margin % (Qtr) 29.30 34.96
Net Profit Margin % Net Margin % (Qtr) 1.30 -28.49