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Gannett (GCI)
NYSE:GCI
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Gannett
(NYSE:GCI)48Neutral
Positive Factors
Digital Advertising Revenue
Engagement remains strong contributing to accelerating digital advertising revenue growth while digital-only subscribers accelerated and digital ARPU reached a new high.
Digital Revenue Growth
Gannett is expected to reaccelerate digital revenue growth by deepening engagement and monetization of its 200M average monthly unique visitors.
Negative Factors
Economic Slowdown Risk
An economic slowdown poses a significant risk, as a recession could lead to a notable decline in Gannett's topline and negatively impact equity value.
Gannett (GCI) vs. S&P 500 (SPY)
Market Cap
$521.69M
Dividend YieldN/A
Average Volume (3M)1.15M
Price to Earnings (P/E)―
Beta (1Y)1.58
Revenue Growth-5.79%
EPS Growth-10.12%
CountryUS
Employees8,900
SectorCommunication Services
Sector Strength85
IndustryTraditional Media
Share Statistics
EPS (TTM)-0.25
Shares Outstanding147,369,060
10 Day Avg. Volume1,272,379
30 Day Avg. Volume1,145,815
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.21
Price to Cash Flow (P/CF)14.50
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.55Price Target Upside59.94% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Gannett Business Overview & Revenue Model
Company DescriptionGannett Co., Inc. (GCI) is a leading media holding company headquartered in McLean, Virginia. The company operates in the publishing and digital media sectors, primarily focusing on delivering news and information through its extensive portfolio of local and national newspapers, digital platforms, and marketing services. Gannett is best known for its flagship publication, USA TODAY, and owns hundreds of local media outlets across the United States. The company is committed to providing high-quality journalism and engaging content to its audiences, while also offering innovative marketing solutions to businesses.
How the Company Makes MoneyGannett generates revenue through a diverse range of streams. Its primary revenue sources include advertising, which encompasses both print and digital advertising across its media properties. This includes display ads, classified ads, and digital marketing services. In addition to advertising, Gannett earns revenue from subscriptions and sales of its print and digital publications. The company also offers marketing and advertising services to small and medium-sized businesses, leveraging its digital marketing expertise to provide solutions such as search engine optimization, social media marketing, and website development. Gannett's strategic partnerships and acquisitions in the digital media space further enhance its revenue potential by expanding its audience reach and diversifying its content offerings.
Gannett Financial Statement Overview
Summary
Gannett's financial performance is marked by declining revenues and persistent net losses. The balance sheet indicates high leverage with an increasing debt-to-equity ratio. While operating cash flow is positive, free cash flow is declining, suggesting liquidity pressures.Income Statement
Gannett's revenue trend shows a declining trajectory with total revenue decreasing from $3.41 billion in 2020 to $2.51 billion in 2024. The company has been unable to generate a positive net income in the past five years, with the most recent net loss of $16.98 million in 2024. Gross profit margins have been decreasing, evident from the gross profit of $2.51 billion on revenues of $2.51 billion in 2024, indicating very thin margins. The EBIT and EBITDA margins have deteriorated, with EBIT turning negative in 2024, reflecting operational challenges.45
Neutral
Balance Sheet
Gannett's balance sheet shows signs of high leverage and weakening equity. The debt-to-equity ratio has increased over the years, reaching 8.41 in 2024, suggesting heavy reliance on debt financing. Stockholders' equity has eroded significantly, declining from $981 million in 2019 to just $153 million in 2024, a concerning trend for potential solvency risks. The equity ratio also stands low at 7.51% in 2024, indicating a highly leveraged position.40
Negative
Cash Flow
The cash flow statement shows mixed results. Operating cash flow has remained positive, but free cash flow has experienced fluctuations, with a decline from $56 million in 2023 to $50.78 million in 2024. The ratio of operating cash flow to net income remains positive, indicating some level of operational efficiency despite consistent net losses. However, the cash flow from financing activities has been negative, reflecting outflows to service debt.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.51B | 2.66B | 2.95B | 3.21B | 3.41B | Gross Profit |
| 2.51B | 971.52M | 1.08B | 1.31B | 1.37B | EBIT |
| -42.84M | 86.27M | 113.21M | 293.60M | 188.44M | EBITDA |
| 183.31M | 261.53M | 289.52M | 478.86M | -263.12M | Net Income Common Stockholders |
| -16.98M | -27.79M | -78.25M | -136.17M | -672.40M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 106.30M | 100.18M | 94.25M | 130.76M | 170.72M | Total Assets |
| 2.04B | 2.18B | 2.39B | 2.83B | 3.11B | Total Debt |
| 1.29B | 1.29B | 1.38B | 1.49B | 1.87B | Net Debt |
| 1.18B | 1.19B | 1.29B | 1.36B | 1.70B | Total Liabilities |
| 1.89B | 1.86B | 2.10B | 2.30B | 2.74B | Stockholders Equity |
| 153.14M | 317.79M | 295.74M | 532.10M | 364.11M |
| Cash Flow | Free Cash Flow | |||
| 50.78M | 56.46M | -4.60M | 87.89M | 20.80M | Operating Cash Flow |
| 100.31M | 94.57M | 40.78M | 127.45M | 57.77M | Investing Cash Flow |
| -27.95M | 46.98M | 22.12M | 70.65M | 160.14M | Financing Cash Flow |
| -68.85M | -135.51M | -102.87M | -261.17M | -201.34M |
Gannett Technical Analysis
Negative
3.47
Price Trends
4.63
Negative
4.97
Negative
4.83
Negative
Market Momentum
-0.32
Positive
21.71
Positive
4.90
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GCI, the sentiment is Negative. The current price of 3.47 is below the 20-day moving average (MA) of 4.26, below the 50-day MA of 4.63, and below the 200-day MA of 4.83, indicating a bearish trend. The MACD of -0.32 indicates Positive momentum. The RSI at 21.71 is Positive, neither overbought nor oversold. The STOCH value of 4.90 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GCI.
Gannett Risk Analysis
Gannett disclosed 42 risk factors in its most recent earnings report. Gannett 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
Gannett Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $2.82B | 4.99 | 21.01% | 2.77% | 6.56% | 57.12% | |
69 Neutral | $7.74B | 26.73 | 15.92% | 1.10% | 6.59% | 26.68% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% | |
59 Neutral | $567.36M | ― | -0.42% | 3.73% | -3.89% | -106.78% | |
48 Neutral | $521.69M | ― | -11.19% | ― | -5.79% | -10.12% | |
37 Underperform | $51.69M | ― | 0.00% | ― | -9.28% | -647.14% |
* Communication Services Sector Average
Performance Comparison
GCI
Gannett
3.47
1.37
65.24%
LEE
Lee Enterprises
8.86
-1.60
-15.30%
NYT
New York Times
49.22
5.65
12.97%
SCHL
Scholastic
21.43
-16.97
-44.19%
TGNA
TEGNA
17.80
3.12
21.25%
Gannett Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -27.71% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call reflects a positive outlook for Gannett due to significant strides in digital revenue growth, audience expansion, and financial performance improvements. However, challenges remain, particularly in declining operating revenues and the impact of external factors on digital marketing solutions and partnerships.Highlights
Digital Revenue Growth
Total digital revenues increased 5% to approximately $1.1 billion in 2024, accounting for 44% of total revenue, up from 39% last year. The expectation is for digital revenues to make up 50% of total revenue in 2025, growing between 7% and 10% on a same-store basis.
Financial Performance Improvement
Adjusted EBITDA increased for the second consecutive year in 2024. Adjusted net income attributable to Gannett rose to $25 million, an improvement of $66 million from a net loss of $41 million in the prior year.
Audience Growth
The digital audience grew to 200 million average monthly unique visitors in Q3 and Q4, a 7% increase versus the prior year in Q4.
Debt Refinancing Success
Successful debt refinancing simplified the capital structure, extended the debt runway, and reduced potential future share dilution, contributing to a healthier balance sheet.
Video Content Expansion
Significant gains in video programming and views from major sporting events were achieved, with plans to expand the video strategy further in 2025.
Lowlights
Decline in Operating Revenues
Total operating revenues decreased 7.2% in Q4 2024. On a same-store basis, revenues decreased 5.5%.
Challenges in Digital Marketing Solutions
Performance was influenced by macroeconomic factors and higher churn among the customer base, affecting growth in the DMS segment.
Impact of Google's Algorithm Changes
Google's updated search policies and algorithm changes negatively impacted partnership revenue, highlighting the need for flexibility in evolving markets.
Company Guidance
During Gannett's Q4 2024 earnings call, the company provided guidance for 2025, highlighting several key metrics. They anticipate 2025 to be their third consecutive year of adjusted EBITDA and free cash flow growth. Gannett aims for total digital revenues to increase by 7% to 10% on a same-store basis, with digital revenue expected to constitute 50% of total revenue, up from 44% in 2024. The company is targeting the inflection point for positive same-store revenue growth during the year. They reported a total digital audience of 200 million average monthly unique visitors, with digital-only subscription revenue experiencing double-digit growth in Q4 2024. Gannett plans to enhance their digital initiatives, focusing on personalized consumer journeys and expanding digital advertising, digital-only paid subscriptions, e-commerce, and video content to drive future growth.Gannett Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Gannett’s Strategic Debt Management and Note Exchanges
Positive
Oct 16, 2024
Gannett Co., Inc. has successfully completed an exchange offer for its outstanding 6.000% Senior Secured Notes, allowing holders to opt for either a loan or cash option, resulting in the tendering and cancellation of $274.6 million worth of notes. Concurrently, Gannett negotiated a private transaction to exchange and repurchase its 2027 Convertible Notes, issuing new 2031 Convertible Notes as part of the process. These financial maneuvers, including amendments to credit agreements, aim to enhance Gannett’s financial flexibility and manage its debt profile effectively.
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.