NXST

We rate NEXSTAR MEDIA GROUP, INC. (NXST) as a Hold with a composite score of 56.1/100 at a current price of $233.30. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (71th percentile) and quality (55th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (34th percentile) and stability (52th percentile) tempers our overall conviction. We assign a No Moat rating (31/100), High uncertainty, and Poor capital allocation.

Key items to watch: whether strong momentum is fundamentally supported by revenue trends; balance sheet deleveraging progress. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

NEXSTAR MEDIA GROUP, INC. holds a top-quartile position (#0 of 50) within the Transportation, Communications, Electric, Gas, And Sanitary Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 56.1/100 places it at rank #1140 in our full 7,333-stock universe. At $6.0B in market capitalization, NEXSTAR MEDIA GROUP, INC. is a mid-cap player in the Transportation, Communications, Electric, Gas, And Sanitary Services space, which limits certain scale advantages but may allow for more agile strategic execution.

Despite positive momentum (71th percentile), revenue contraction of -6% creates a divergence between price action and fundamental trajectory. This divergence suggests either that the market is looking through near-term weakness or that technical factors are temporarily inflating the stock. Investors should assess whether the revenue decline reflects cyclical weakness or structural challenges.

The margin cascade tells an important story: gross margins of 55% (+0.3pp vs sector) narrow to operating margins of 19% (+1.0pp vs sector) and net margins of 8.5%, yielding a gross-to-net conversion rate of 15%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $233.30, NEXSTAR MEDIA GROUP, INC. is trading near fair value based on current fundamentals. Our value factor score of 53/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 16.2x (roughly in line with the sector median of 16.9x), EV/EBITDA of 9.4x (at a premium), P/B of 3.1x, P/S of 1.4x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.

We assign a High uncertainty rating to NEXSTAR MEDIA GROUP, INC.. Key risk factors include significant leverage (281% debt-to-equity). The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: significant leverage (281% debt-to-equity). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 52th percentile and quality factor at the 55th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 55% provide a buffer against cost pressures; a 3.68% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate NEXSTAR MEDIA GROUP, INC.'s capital allocation as Poor. Key concerns include elevated leverage (281% D/E). Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — NEXSTAR MEDIA GROUP, INC. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.

Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.

In summary, NEXSTAR MEDIA GROUP, INC. receives a Hold rating with a composite score of 56.1/100 (rank #1140 of 7,333). Our quantitative framework assigns a No Moat (31/100, trend: stable), High uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 53/100.

Our analysis supports a neutral stance on NEXSTAR MEDIA GROUP, INC.. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.