The television broadcasting and digital media company was upgraded to "outperform" from "neutral" at Wedbush Capital Partners.
The ratings change was the result of a valuation call, based on the company's solid free cash flow prospects.
Must Read: Warren Buffett's 10 Favorite Growth StocksSTOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. TheStreet Ratings team rates NEXSTAR BROADCASTING GROUP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation: "We rate NEXSTAR BROADCASTING GROUP (NXST) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and feeble growth in the company's earnings per share." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 4.0%. Since the same quarter one year prior, revenues rose by 18.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, NXST's share price has jumped by 104.88%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- The gross profit margin for NEXSTAR BROADCASTING GROUP is rather high; currently it is at 64.92%. Regardless of NXST's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, NXST's net profit margin of -9.01% significantly underperformed when compared to the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has significantly decreased by 107.7% when compared to the same quarter one year ago, falling from $161.10 million to -$12.45 million.
- Net operating cash flow has significantly decreased to -$18.39 million or 264.79% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- You can view the full analysis from the report here: NXST Ratings Report