Nexstar Media Group, Inc. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Nexstar Media Group, Inc. (NASDAQ:NXST) shares fell 3.9% to US$102 in the week since its latest third-quarter results. Revenues of US$664m beat expectations by 3.2%. Unfortunately earnings per share (EPS) fell well short of the mark, turning in a loss of US$0.13 compared to previous analyst expectations of a profit. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings consensus estimates to see what could be in store for next year.
View our latest analysis for Nexstar Media Group
Following the latest results, Nexstar Media Group's six analysts are now forecasting revenues of US$4.66b in 2020. This would be a sizeable 70% improvement in sales compared to the last 12 months. Earnings per share are expected to bounce 170% to US$15.87. Before this earnings report, analysts had been forecasting revenues of US$4.83b and earnings per share (EPS) of US$17.35 in 2020. It's pretty clear that analyst sentiment has fallen after the latest results, leading to lower revenue forecasts and a small dip in earnings per share estimates.
Analysts made no major changes to their price target of US$140, suggesting the downgrades are not expected to have a long-term impact on Nexstar Media Group's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Nexstar Media Group analyst has a price target of US$157 per share, while the most pessimistic values it at US$113. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Nexstar Media Group shareholders.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Nexstar Media Group's past performance and to peers in the same market. Analysts are definitely expecting Nexstar Media Group's growth to accelerate, with the forecast 70% growth ranking favourably alongside historical growth of 32% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 3.6% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Nexstar Media Group is expected to grow much faster than its market.
The Bottom Line
The biggest highlight of the new consensus is that analysts have reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Nexstar Media Group. Unfortunately analysts also downgraded their revenue estimates, although industry data suggests that Nexstar Media Group's revenues are expected to grow faster than the wider market. The consensus price target held steady at US$140, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Nexstar Media Group analysts - going out to 2022, and you can see them free on our platform here.
You can also view our analysis of Nexstar Media Group's balance sheet, and whether we think Nexstar Media Group is carrying too much debt, for free on our platform here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
