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Sinclair Broadcast (SBGI)
NASDAQ:SBGI
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Sinclair Broadcast
(NASDAQ:SBGI)
56Neutral
Positive Factors
Debt Management
Sinclair made significant progress towards removing their impending debt overhang by announcing plans regarding the remainder of the cap structure, pushing out all meaningful maturities until 2029.
Regulatory Changes
The expectation of a Republican-controlled FCC is likely to lead to deregulation in the broadcast sector, which could benefit Sinclair Broadcast Group.
Renewal Rates
Sinclair beating the high-end of their prior guide by $4-5 million suggests that renewal rates are remaining healthy.
Negative Factors
Automotive Sector Challenges
Tougher automotive comparisons and a more uncertain national brand outlook may conspire to limit core growth, with auto potentially getting a double hit from interest rate uncertainty and muted incentive spend.
Financial Performance
Sinclair Broadcast Group's Q3 revenue and adjusted EBITDA both missed their pre-announced guidance ranges, indicating weaker-than-expected performance.
Political Revenue Guidance
The full-year 2024 political revenue guidance for Sinclair Broadcast Group has been lowered, reflecting a shift in political advertising spend to other markets.
Sinclair Broadcast (SBGI) vs. S&P 500 (SPY)
Market Cap
$883.38M
Dividend Yield7.48%
Average Volume (3M)465.64K
Price to Earnings (P/E)2.8
Beta (1Y)1.17
Revenue Growth13.21%
EPS GrowthN/A
CountryUS
Employees7,200
SectorCommunication Services
Sector Strength98
IndustryEntertainment
Share Statistics
EPS (TTM)4.64
Shares Outstanding42,694,275
10 Day Avg. Volume445,381
30 Day Avg. Volume465,642
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.32
Price to Cash Flow (P/CF)1.40
P/FCF Ratio1.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$19.50Price Target Upside37.91% Upside
Rating ConsensusHold
Number of Analyst Covering4
Sinclair Broadcast Business Overview & Revenue Model
Company DescriptionSinclair, Inc. owns and operates as a broadcast television company. The Company engages consumers on multiple platforms with relevant and compelling news, entertainment, and sports content, as well as provides advertisers and businesses efficient means and value to connect with our mass audiences.
How the Company Makes MoneySinclair Broadcast Group generates revenue primarily through advertising sales, retransmission consent fees, and distribution fees. Advertising sales constitute a significant portion of its income, with local and national advertisers purchasing airtime during its broadcast programming. Retransmission consent fees are payments made by cable and satellite providers to broadcast Sinclair's channels, contributing a substantial portion of revenue. Additionally, Sinclair owns regional sports networks, which generate income through subscription fees and advertising. The company also benefits from partnerships with major networks and digital platforms, further enhancing its revenue potential through content distribution agreements and digital advertising.
Sinclair Broadcast Financial Statement Overview
Summary
Sinclair Broadcast shows signs of recovery with strong revenue growth and improved net income in 2024. However, historical volatility and high leverage pose ongoing risks. The balance sheet is strained by significant debt levels, while cash flow generation, though positive, remains inconsistent.Income Statement
Sinclair Broadcast's income statement shows mixed results. The gross profit margin is strong at 100% for 2024, but the net profit margin is modest at 8.7%. Revenue growth has rebounded from a decline in 2023, with a 13.2% increase in 2024. The EBIT and EBITDA margins are both healthy in 2024, at 15.5%. However, the company faced significant challenges in previous years, including negative EBIT and EBITDA in 2023, which affects the overall score.45
Neutral
Balance Sheet
The balance sheet reveals a high debt-to-equity ratio of 7.34 for 2024, indicating significant leverage, which poses financial risk. The equity ratio is low at 9.9%, suggesting limited shareholder equity relative to total assets. Return on Equity (ROE) is strong at 53.2% in 2024, driven by substantial net income recovery. However, the overall financial stability is compromised by high debt levels and fluctuating equity.40
Negative
Cash Flow
Cash flow analysis shows a positive free cash flow of $98 million in 2024, with a notable free cash flow to net income ratio of 0.32, suggesting some efficiency in converting profits to cash. The operating cash flow to net income ratio is low at 0.32, indicating less cash generation from operations relative to net income. Free cash flow has grown since 2023, but the historical volatility in cash flows impacts the score.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.55B | 3.13B | 3.93B | 6.13B | 5.94B | Gross Profit |
| 3.55B | 1.47B | 1.94B | 1.84B | 3.21B | EBIT |
| 551.00M | -331.00M | 486.00M | 55.00M | 1.67B | EBITDA |
| 949.00M | -45.00M | 4.65B | 3.15B | -655.00M | Net Income Common Stockholders |
| 310.00M | -291.00M | 2.65B | -326.00M | -2.43B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 697.00M | 662.00M | 884.00M | 816.00M | 1.26B | Total Assets |
| 5.88B | 6.08B | 6.70B | 12.54B | 13.38B | Total Debt |
| 4.28B | 4.35B | 4.44B | 12.58B | 12.78B | Net Debt |
| 3.58B | 3.69B | 3.56B | 11.76B | 11.52B | Total Liabilities |
| 5.37B | 5.86B | 6.02B | 14.25B | 14.57B | Stockholders Equity |
| 583.00M | 285.00M | 748.00M | -1.77B | -1.27B |
| Cash Flow | Free Cash Flow | |||
| 98.00M | 143.00M | 694.00M | 247.00M | 1.39B | Operating Cash Flow |
| 98.00M | 235.00M | 799.00M | 327.00M | 1.55B | Investing Cash Flow |
| 77.00M | 52.00M | -381.00M | -246.00M | -159.00M | Financing Cash Flow |
| -140.00M | -509.00M | -353.00M | -524.00M | -1.46B |
Sinclair Broadcast Technical Analysis
Negative
14.14
Price Trends
14.77
Negative
15.46
Negative
14.81
Negative
Market Momentum
0.42
Positive
55.40
Neutral
30.28
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SBGI, the sentiment is Negative. The current price of 14.14 is below the 20-day moving average (MA) of 15.47, below the 50-day MA of 14.77, and below the 200-day MA of 14.81, indicating a bearish trend. The MACD of 0.42 indicates Positive momentum. The RSI at 55.40 is Neutral, neither overbought nor oversold. The STOCH value of 30.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SBGI.
Sinclair Broadcast Risk Analysis
Sinclair Broadcast disclosed 35 risk factors in its most recent earnings report. Sinclair Broadcast 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
Sinclair Broadcast Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $4.60B | 7.04 | 31.65% | 4.60% | 9.61% | 128.67% | |
74 Outperform | $2.52B | 4.45 | 21.01% | 3.15% | 6.56% | 57.12% | |
71 Outperform | $405.63M | 1.10 | 13.50% | 9.52% | 11.06% | ― | |
58 Neutral | $27.01B | 3.11 | -10.53% | 4.44% | 2.30% | -43.13% | |
56 Neutral | $883.38M | 2.83 | 71.43% | 7.48% | 13.21% | ― | |
47 Neutral | $171.95M | ― | -60.60% | 10.58% | -49.03% | -559.75% | |
41 Neutral | $17.99M | ― | -193.00% | ― | -2.07% | -138.25% |
* Communication Services Sector Average
Performance Comparison
SBGI
Sinclair Broadcast
14.14
2.93
26.14%
CMLS
Cumulus Media
0.32
-2.78
-89.68%
EVC
Entravision
1.91
0.06
3.24%
GTN
Gray Television
3.69
-1.57
-29.85%
NXST
Nexstar Media Group
159.40
3.30
2.11%
TGNA
TEGNA
16.89
3.53
26.42%
Sinclair Broadcast Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -0.42% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Sinclair's strong performance in political advertising and successful distribution negotiations, alongside a comprehensive refinancing effort. However, challenges in core advertising revenue and ongoing negotiations with MVPDs present concerns. Despite these challenges, the company's strategic initiatives in NextGen broadcast and refinancing position it well for future growth.Highlights
Record Political Advertising Revenues
Sinclair reported record-breaking political advertising revenues of $405 million in 2024, doubling the 2016 presidential year results.
Successful Distribution and Network Affiliation Agreements
Achieved over 5% net retransmission growth year-over-year in 2024 with successful renewals covering 80% of the Big 4 subscriber base.
Strong Adjusted EBITDA Performance
Fourth quarter adjusted EBITDA of $330 million exceeded guidance by $5 million.
Comprehensive Refinancing
Completed a comprehensive refinancing, resulting in an extended weighted average debt maturity of over six and a half years.
NextGen Broadcast and EdgeBeam Wireless
Joint venture with Scripps, Gray, and Nexstar for NextGen broadcast efforts expected to cover 98% of U.S. households.
Lowlights
Core Advertising Revenue Decline
Core advertising revenue declined by 9% year-over-year in the fourth quarter, primarily due to political crowd out and macroeconomic pressures.
First Quarter 2025 Guidance
Consolidated adjusted EBITDA is expected to be lower in the first quarter of 2025 compared to the previous year, impacted by the absence of significant political revenues.
Challenges in MVPD Negotiations
20% of retransmission agreements are still under negotiation, reflecting ongoing challenges in securing agreements with MVPDs.
Company Guidance
During the Sinclair Fourth Quarter 2024 Earnings Conference Call, the company provided several key metrics and guidance for the upcoming period. Sinclair reported a record $405 million in political advertising revenues, doubling the results from the 2026 presidential year. The company's adjusted EBITDA for the fourth quarter was $330 million, surpassing the high end of their guidance range by $5 million. Distribution revenue also exceeded expectations with over 5% net retransmission growth year-over-year. For the first quarter of 2025, Sinclair anticipates media revenues to decline by 2% to 4% year-over-year, with core advertising expected to be down approximately 3% at the midpoint of their guidance range. However, distribution revenues are projected to grow by 4% year-over-year. Sinclair also highlighted the successful completion of a refinancing initiative, extending its debt maturities and reducing leverage, positioning the company well for potential M&A activity. The company expressed optimism about its future, citing a strengthened balance sheet and expected regulatory changes that could enhance growth opportunities.Sinclair Broadcast Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Sinclair Broadcast Initiates Debt Recapitalization Agreement
Positive
Jan 14, 2025
On January 14, 2025, Sinclair announced that its subsidiary, Sinclair Television Group, entered into a Transaction Support Agreement with its secured creditors to initiate new financings and a debt recapitalization. This strategic move aims to enhance the company’s financial liquidity and flexibility, pushing significant debt maturities to December 2029 and reducing first lien net leverage. The agreement, supported by a majority of creditors, is designed to position Sinclair for long-term growth and improve stakeholder returns by allowing the company to continue deleveraging and seizing market opportunities.
Private Placements and FinancingBusiness Operations and Strategy
Sinclair Broadcast Announces Financial Restructuring Agreement
Positive
Jan 14, 2025
On January 14, 2025, Sinclair, Inc. announced a Transaction Support Agreement to enhance its financial structure through new financings and debt recapitalization. This agreement, backed by a majority of its creditors, aims to improve Sinclair’s financial liquidity and flexibility, pushing significant debt maturities to December 2029, which is expected to reduce leverage and enhance returns for stakeholders.
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.