Why Nexstar Broadcasting Group (NXST) Stock Is Climbing This Morning

NEW YORK (TheStreet) -- Shares of Nexstar Broadcasting Group Inc. (NXST) are higher by 3.46% to $51.67 on Monday morning as TV broadcasting stocks continue to gain after last Wednesday's U.S. Supreme Court ruling stating the online video service Aero Inc. violated copyright laws by streaming broadcast TV programs.

On Saturday, June 28 Aero suspended its operations as it looks to re-evaluate its business strategy following the Supreme Court decision, the Wall Street Journal reports.

Other broadcasting stocks increasing as a result include Sinclair Broadcasting Group (SBGI), up 2.02% to $35.32, and Grey Television Inc. (GTN), up 3.75% to $13.27.

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Separately, 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, increase in net income and good cash flow from operations. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • NXST's revenue growth has slightly outpaced the industry average of 14.6%. Since the same quarter one year prior, revenues rose by 19.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Media industry. The net income increased by 943.0% when compared to the same quarter one year prior, rising from $0.71 million to $7.35 million.
  • The gross profit margin for NEXSTAR BROADCASTING GROUP is rather high; currently it is at 62.28%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 5.49% trails the industry average.
  • NEXSTAR BROADCASTING GROUP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, NEXSTAR BROADCASTING GROUP swung to a loss, reporting -$0.08 versus $5.69 in the prior year. This year, the market expects an improvement in earnings ($2.51 versus -$0.08).
  • Powered by its strong earnings growth of 1050.00% and other important driving factors, this stock has surged by 30.97% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, however, we cannot assume that the stock's past performance is going to drive future results. Quite to the contrary, its sharp appreciation over the last year is one of the factors that should prompt investors to seek better opportunities elsewhere.
  • You can view the full analysis from the report here: NXST Ratings Report
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