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Sinclair Broadcast (SBGI)
NASDAQ:SBGI
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Sinclair Broadcast
(NASDAQ:SBGI)
Rating:67Neutral
Price Target:
$16.00
▲( 13.23% Upside)
Positive Factors
Expense Management
Lucy Rutishauser once again pulled the expense vanishing trick, setting the company up well for 2025 and beyond.
Revenue Growth
Net retrans grew at a mid-single-digit pace, remaining on track for Sinclair’s medium-term guidance, while another quarter of better-than-expected cost saves ended up driving EBITDA of $112 million.
Strategic Management
Sinclair's potential commitment to both a buyback and debt paydown demonstrates strategic financial management.
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.
Revenue Uncertainty
Management did pull their full year media expense guidance, suggesting that the range of revenue outcomes is substantially wider than previously anticipated, and that visibility remains extremely limited.
Sinclair Broadcast (SBGI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$983.05M
Dividend Yield7.13%
Average Volume (3M)368.57K
Price to Earnings (P/E)7.2
Beta (1Y)0.92
Revenue Growth11.62%
EPS GrowthN/A
CountryUS
Employees7,200
SectorCommunication Services
Sector Strength86
IndustryEntertainment
Share Statistics
EPS (TTM)-2.30
Shares Outstanding45,796,486
10 Day Avg. Volume348,727
30 Day Avg. Volume368,567
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)1.74
Price to Sales (P/S)0.00
P/FCF Ratio11.91
Enterprise Value/Market Cap4.72
Enterprise Value/Revenue0.35
Enterprise Value/Gross Profit2.82
Enterprise Value/Ebitda3.21
Forecast
1Y Price Target
$19.75Price Target Upside39.77% Upside
Rating ConsensusHold
Number of Analyst Covering4
Sinclair Broadcast Business Overview & Revenue Model
Company DescriptionSinclair Broadcast Group, Inc. (SBGI) is one of the largest television broadcasting companies in the United States. The company operates a robust portfolio of television stations, delivering a wide range of local news, sports, and entertainment content. Sinclair owns or operates numerous television stations across various markets, providing content across multiple platforms, including cable, satellite, and digital. Its subsidiaries also engage in the ownership and management of various sports networks and digital media properties.
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's financial performance shows signs of recovery in 2024 with strong income growth and profitability. However, high leverage and historical volatility pose significant risks. The income statement reflects a rebound in revenue and net income, but the balance sheet indicates financial instability due to high debt levels. Cash flow generation is positive yet inconsistent, impacting the overall financial health.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 |
| 1.83B | 1.47B | 1.94B | 1.84B | 3.21B | EBIT |
| 551.00M | -331.00M | 486.00M | 55.00M | 1.67B | EBITDA |
| 1.02B | -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 | |||
| 14.00M | 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
14.13
Price Trends
15.02
Negative
14.87
Negative
15.01
Negative
Market Momentum
-0.05
Positive
39.40
Neutral
11.14
Positive
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 14.13 is below the 20-day moving average (MA) of 15.04, below the 50-day MA of 15.02, and below the 200-day MA of 15.01, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 39.40 is Neutral, neither overbought nor oversold. The STOCH value of 11.14 is Positive, 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 (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $5.17B | 8.43 | 28.46% | 4.04% | 8.00% | 71.49% | |
67 Neutral | $983.05M | 7.15 | 34.07% | 7.13% | 11.62% | ― | |
60 Neutral | $14.12B | 6.43 | -3.57% | 3.69% | 2.49% | -35.43% | |
56 Neutral | $8.43B | ― | -28.56% | 1.69% | -4.50% | -898.86% | |
55 Neutral | $278.55M | 13.94 | -25.83% | ― | -8.14% | -258.98% |
* Communication Services Sector Average
Performance Comparison
SBGI
Sinclair Broadcast
14.13
2.57
22.23%
AMCX
AMC Networks
6.20
-10.86
-63.66%
PARA
Paramount Global Class B
11.97
0.18
1.53%
NXST
Nexstar Media Group
171.51
20.49
13.57%
Sinclair Broadcast Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: -9.94%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of both achievements and challenges. Sinclair highlighted strong core advertising performance, strategic partnerships, and successful refinancing efforts. However, challenges such as distribution revenue falling below expectations, reduced visibility due to macroeconomic uncertainties, and a decline in core advertising revenue were also noted. Despite these challenges, Sinclair's financial position remains strong, supported by lower cash tax payments and successful expense management.Q1-2025 Updates
Positive Updates
Strong Core Advertising Performance
Sinclair reported strong core advertising performance, with total advertising revenues within the guidance range despite macroeconomic uncertainties.
Distribution Revenue Increase
Distribution revenues increased by $15 million year-over-year, with Charter reducing video subscriber discounts by 55% year-over-year.
Successful Ventures Portfolio Transformation
The Ventures portfolio benefited from $10 million of cash distributions and invested $38 million, including $30 million for an acquisition by Compulse.
Tennis Channel and Strategic Partnerships
Jeff Blackburn was hired as Chairman and CEO of Tennis Channel, with Verizon announced as the first sponsor in a new comprehensive sponsorship package partnership.
Adjusted EBITDA Exceeds Guidance
Adjusted EBITDA exceeded the high end of the guidance range by approximately $9 million, driven by favorable SG&A and promotional expenses.
Strong Liquidity and Lower Cash Tax Payments
Sinclair forecasts much lower cash tax payments of $121 million, $95 million lower than prior guidance due to revised estimates.
Refinancing and Debt Repurchase
Completed comprehensive refinancing and repurchased $66 million of STG's 2027 notes at a discount.
Negative Updates
Distribution Revenue Below Expectations
Despite an increase, distribution revenues came in $2 million below guidance due to subscriber churn not improving as expected.
Core Advertising Revenue Decline
Core advertising revenues were down 4.5% year-over-year, with continued softness in core advertising categories expected.
Reduced Visibility and Uncertainty
The company cited macroeconomic and tariff-related uncertainty, causing reduced visibility and a wide range of potential outcomes for the second half of the year.
Continued Churn in Subscriber Base
Subscriber churn continues to moderate but at a slower pace than anticipated, affecting distribution revenue.
Lower Year-Over-Year Media Revenues
Media revenues fell by approximately $22 million year-over-year due to lower political advertising revenues and the absence of material diamond sports management fees.
Company Guidance
During Sinclair, Inc.'s First Quarter 2025 Earnings Conference Call, the company provided guidance highlighting several key metrics. Total media revenue was reported to be in line with expectations, driven by strong core advertising performances. Total advertising revenues met the guidance range, excluding the impact of an acquisition by Compulse. Distribution revenues increased by $15 million year-over-year, although they were $2 million below the guidance due to moderated subscriber churn improvements. Media expenses were better than expected, leading to adjusted EBITDA comfortably exceeding the high end of the guidance range. For the second quarter, media revenues are expected to be lower year-over-year due to significantly lower political revenues and some softness in core advertising categories. Local Media core advertising revenue is anticipated to decline by approximately 2% at the midpoint, while distribution revenues are expected to increase by 1% year-over-year. The consolidated adjusted EBITDA for the second quarter is projected to be between $91 million and $107 million. The company did not provide a full-year media expense line item due to reduced visibility amid macroeconomic and tariff-related uncertainties.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.