Stock Analysis & Valuation Nexstar Media Group, Inc. (NXST)

• Previous Close: $212.38
• Sector Valuation Confidence Level: High

Valuation method	Value, $	Upside, %
Artificial intelligence (AI)	354.15	67
Intrinsic value (DCF)	79.22	-63
Graham-Dodd Method		n/a
Graham Formula	386.87	82

Strategic Investment Analysis

Company Overview

Nexstar Media Group, Inc. (NASDAQ: NXST) is a leading television broadcasting and digital media company in the United States, operating the largest local TV station portfolio in the country. Headquartered in Irving, Texas, Nexstar owns, operates, or provides services to 198 television stations, including affiliates of major networks such as ABC, NBC, FOX, CBS, The CW, and MyNetworkTV. The company also owns WGN America, a national general entertainment cable network, and offers digital media services through interactive community websites and advertising platforms. Nexstar’s business model revolves around local broadcasting, leveraging its extensive reach to deliver free programming and targeted advertising solutions. With a strong presence in mid-sized and smaller markets, Nexstar benefits from stable retransmission fees, political ad spending cycles, and digital ad growth. As the media landscape shifts toward streaming and digital consumption, Nexstar remains a key player in local news and entertainment, positioning itself as a bridge between traditional broadcasting and modern digital content distribution.

Investment Summary

Nexstar Media Group presents a compelling investment case due to its dominant position in local broadcasting, diversified revenue streams (retransmission fees, advertising, and digital services), and strong free cash flow generation. The company benefits from cyclical political ad spending and stable retransmission agreements with cable and streaming providers. However, risks include high leverage (total debt of $6.52B), exposure to declining linear TV viewership, and regulatory uncertainties around media ownership rules. Nexstar’s dividend yield (~1.4%) and consistent profitability (net income of $722M in FY 2023) make it attractive for income-focused investors, but its beta of 1.04 suggests moderate volatility relative to the broader market.

Competitive Analysis

Nexstar Media Group’s competitive advantage lies in its scale as the largest local TV broadcaster in the U.S., giving it significant bargaining power in retransmission fee negotiations and advertising sales. Its focus on local news and community-driven content differentiates it from national media conglomerates, fostering viewer loyalty and stable ad revenues. The company’s digital expansion, including its ownership of NewsNation (a cable news network), helps mitigate cord-cutting risks. However, Nexstar faces intense competition from streaming platforms (e.g., Netflix, YouTube) and digital-first news outlets, which are eroding traditional TV audiences. Its high debt load could limit strategic flexibility compared to peers with stronger balance sheets. Nexstar’s ability to monetize its local content across linear and digital platforms will be critical in maintaining its competitive edge. While its affiliate relationships with major networks provide stability, reliance on third-party content exposes it to potential renegotiation risks.

Major Competitors

• TEGNA Inc. (TGNA): TEGNA operates 64 TV stations in 51 markets, with a strong focus on investigative journalism and digital transformation. Its premium content and data-driven advertising solutions give it an edge in local markets, but its smaller scale compared to Nexstar limits retransmission fee leverage. TEGNA’s lack of a national cable network like WGN America also reduces diversification.
• Sinclair Broadcast Group (SBGI): Sinclair owns or operates 185 TV stations, making it Nexstar’s closest peer in scale. However, Sinclair’s controversial reputation and regulatory challenges (e.g., failed Tribune acquisition) have weakened its competitive position. Nexstar’s stronger balance sheet and more stable management give it an advantage in long-term growth.
• The Walt Disney Company (DIS): Disney’s ABC Network competes indirectly with Nexstar’s local affiliates. Disney’s dominance in sports (ESPN) and streaming (Disney+) poses a long-term threat to traditional TV, but Nexstar’s hyper-local focus provides a niche buffer. Disney’s resources far exceed Nexstar’s, but its lack of local station ownership limits direct competition.
• Fox Corporation (FOXA): Fox owns 29 local TV stations and competes with Nexstar in news and sports broadcasting. Fox’s strong national brands (Fox News, Fox Sports) give it an edge in content, but Nexstar’s larger local footprint provides better regional ad pricing power. Fox’s streaming investments (Tubi) could challenge Nexstar’s digital growth.