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Local broadcasting and digital media company Nexstar (NASDAQ:NXST) announced better-than-expected revenue in Q1 CY2025, but sales fell by 3.9% year on year to $1.23 billion. Its GAAP profit of $3.37 per share was 8.4% above analysts’ consensus estimates.

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Nexstar Media (NXST) Q1 CY2025 Highlights:

• Revenue: $1.23 billion vs analyst estimates of $1.23 billion (3.9% year-on-year decline, 0.6% beat)

• EPS (GAAP): $3.37 vs analyst estimates of $3.11 (8.4% beat)

• Adjusted EBITDA: $381 million vs analyst estimates of $359.7 million (30.9% margin, 5.9% beat)

• Operating Margin: 17.8%, down from 21.4% in the same quarter last year

• Free Cash Flow Margin: 24.5%, down from 28.7% in the same quarter last year

• Market Capitalization: $4.71 billion

Company Overview

Founded in 1996, Nexstar (NASDAQ:NXST) is an American media company operating numerous local television stations and digital media outlets across the country.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Regrettably, Nexstar Media’s sales grew at a sluggish 8.9% compounded annual growth rate over the last five years. This was below our standard for the consumer discretionary sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Nexstar Media’s recent performance shows its demand has slowed as its revenue was flat over the last two years.

Nexstar Media also breaks out the revenue for its most important segments, Distribution and Core Advertising, which are 61.8% and 37.3% of revenue. Over the last two years, Nexstar Media’s Distribution revenue (licensing and affiliate fees) averaged 5.9% year-on-year growth. On the other hand, its Core Advertising revenue (TV and radio ads) averaged 4.2% declines.

This quarter, Nexstar Media’s revenue fell by 3.9% year on year to $1.23 billion but beat Wall Street’s estimates by 0.6%.

Looking ahead, sell-side analysts expect revenue to decline by 6.8% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges.

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