Gray Television (GTN) AI Stock Analysis

• Market Cap: $377.32M
• Dividend Yield: 9.55%
• Average Volume (3M): 1.86M
• Price to Earnings (P/E): 1.0
• Beta (1Y): 0.62
• Revenue Growth: 11.06%
• EPS Growth: N/A
• Country: US
• Employees: 9,118
• Sector: Communication Services
• Sector Strength: 77
• Industry: Broadcasting
• EPS (TTM): 3.33
• Shares Outstanding: 92,287,560
• 10 Day Avg. Volume: 1,662,245
• 30 Day Avg. Volume: 1,859,381
• PEG Ratio: 0.02
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.14
• Price to Cash Flow (P/CF): 0.30
• P/FCF Ratio: 0.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $5.67
• Price Target Upside: 69.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

Gray Television's robust financial performance, characterized by strong revenue growth and improving profit margins, is offset by high leverage and capital allocation risks. The stock benefits from favorable technical indicators and an attractive valuation, with a low P/E ratio and high dividend yield. Despite challenges in advertising revenue, strategic moves in programming and debt reduction are promising. Overall, the stock is positioned well, but investors should remain cautious about the potential impact of economic uncertainties on core advertising revenue.

Positive Factors

Debt Reduction

The company is making progress on its debt load and saving on interest expense, reducing debt outstanding by $520 million.

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.

Profitability

Lower-than-expected expense levels supported profitability, with EBITDA of $325 million, ahead of expectations.

Negative Factors

Leverage Concerns

GTN is one of the more levered stocks, and with political and core coming in lighter, there's investor angst.

Profitability Guidance

The softness in the company’s guidance suggests a lower level of profitability in the first quarter.

Revenue Challenges

Several challenging trends include continuing linear churn, a slowing pace of progress in retransmission revenue generation, and still-high programming costs obligations.

Gray Television Business Overview & Revenue Model

Company Description

Gray Television, Inc. is a media company headquartered in Atlanta, Georgia, focusing primarily on broadcasting television stations and digital content. The company owns and operates television stations across the United States, providing comprehensive local news, weather, sports, and entertainment programming. Gray Television's portfolio includes stations affiliated with major networks such as CBS, NBC, ABC, and FOX, as well as digital properties and platforms that extend its reach and engagement with audiences.

How the Company Makes Money

Gray 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.

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.

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.

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
3.52B	898.00M	1.43B	803.00M	989.00M
	EBIT
851.00M	383.00M	990.00M	381.00M	752.00M
	EBITDA
1.27B	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
10.54B	10.64B	11.15B	11.11B	7.64B
	Total Debt
92.00M	6.24B	6.53B	6.83B	4.03B
	Net Debt
92.00M	6.22B	6.47B	6.64B	3.26B
	Total Liabilities
7.61B	8.02B	8.39B	8.70B	5.24B
	Stockholders Equity
2.28B	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

• Technical Analysis Sentiment: Negative
• Last Price: 3.35
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 3.35 is below the 20-day moving average (MA) of 4.29, below the 50-day MA of 4.02, and below the 200-day MA of 4.40, indicating a bearish trend. The MACD of 0.16 indicates Positive momentum. The RSI at 50.48 is Neutral, neither overbought nor oversold. The STOCH value of 13.75 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GTN.

Gray Television Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NXST	79 Outperform	$4.64B	7.10	31.65%	4.56%	9.61%	128.67%
TGNA	74 Outperform	$2.55B	4.49	21.01%	3.15%	6.56%	57.12%
GTN	71 Outperform	$377.32M	1.00	13.50%	9.55%	11.06%	―
Sector *	58 Neutral	$25.97B	3.12	-10.67%	4.37%	2.16%	-43.01%
SBGI	56 Neutral	$876.73M	2.81	71.43%	7.58%	13.21%	―
CMLS	43 Neutral	$17.58M	―	-193.00%	―	-2.07%	-138.25%
IHRT	42 Neutral	$167.78M	―	86.54%	―	2.76%	9.71%