NEXSTAR MEDIA GROUP, INC. (NXST): what the price assumes

In the published model solve dated 2026-Q2, anchored at $183.32, NEXSTAR MEDIA GROUP, INC. (NXST) is priced for -4.8% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-18.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/NXST

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 3.8% sits below it).

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.1%); the inversion above states its own rate.

Per-Model Detail (n=13)

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Nexstar is the largest local-TV broadcaster in the country, and its economics have flipped from advertising to distribution: retransmission and distribution fees are now about 59% of revenue, recurring per-subscriber payments under "multi-year contracts" that the company collects "per subscriber" from cable and streaming-TV distributors.
• The defining risk is leverage against a shrinking pay-TV base: net debt sits near $11.8 billion, about 13 times trailing operating income, while the filing warns that if "the rate of reductions in the number of MVPD subscribers increases, this could also have an adverse effect on our business."
• What to watch is the pending TEGNA acquisition, which awaits FCC approval of the transfer-of-control documents, and the 2026 political ad cycle, which swings revenue by hundreds of millions between election and off years.

Bull Case

What the standard models miss about Nexstar is the cadence of the business. Local broadcasting runs on a two-year heartbeat: political advertising floods in during election years and drains out in the off years, so any valuation method anchored on the most recent twelve months is reading a trough. Third-quarter 2025 advertising revenue fell 23.5%, driven almost entirely by political ad spending collapsing to $10 million from the prior election-year level. That is not deterioration; it is the calendar. Price the stock on a single odd-year and every model concludes it is expensive. Price it across a full cycle, including the 2024 year when net revenue reached $5,407 million, up 9.6% on political and distribution strength, and the cash-generation picture is entirely different.

The quality of the business has also shifted under the surface. Distribution, the retransmission fees Nexstar collects from cable and streaming providers, is now the majority of revenue at about 59% of the mix, and it behaves like a subscription. The arrangements are "multi-year contracts" that pay "a monthly amount the Company is entitled to receive per subscriber," and second-quarter distribution revenue held essentially flat year on year as rate increases and streaming-TV subscriber growth offset traditional cable losses. A recurring, contracted revenue base that reprices higher every renewal cycle is a steadier engine than the old advertising-only broadcaster ever had.

Management turns that cash into shareholder returns at an aggressive pace. Nexstar returned roughly $820 million through buybacks and dividends, funded by cash on hand, raised the quarterly dividend 10% to $1.86 per share, and added $1.5 billion to its repurchase authorization. The share count is shrinking about 7% a year, which means free cash flow per remaining share compounds even if total cash flow merely holds. The pending TEGNA acquisition, if cleared by the FCC, would extend the same retransmission-leverage model across a far larger station footprint. The bull case is that the methods see a declining advertiser and miss a deleveraging, share-shrinking cash machine on a biennial cycle.

Bear Case

The methods do not agree on this stock, and the disagreement itself is the bear's strongest evidence. At $164 (June 27, 2026), not a single valuation family reaches the price. The asset-based methods, book value plus profitability, land near a third of it; the earnings-power methods, which capitalize a normalized operating profit, land around half to two-thirds of it; even the peer-multiple and forward-growth methods come up short. When the conservative, asset-anchored approaches and the cash-flow approaches all say the same thing, that the price sits well above what the business demonstrably earns, the honest read is to weight them, not to explain them away. The one method that gets near the price does so only if today's EBITDA multiple never fades across the entire projection, which is an assumption about the durability of pay-TV, not a finding about value.

And pay-TV is the structural problem. Nexstar's distribution revenue depends on the number of subscribers paying cable and streaming-TV bills, and that base is in secular decline. The filing is explicit: retransmission agreements "include payment terms by subscriber numbers, if the rate of reductions in the number of MVPD subscribers increases, this could also have an adverse effect on our business revenues." The company has been outrunning cord-cutting with rate increases, but that is a race with a finite track; eventually per-subscriber rates hit the ceiling distributors will tolerate, and the declining subscriber count does the rest. The advertising half of the business faces its own erosion as ad dollars migrate to digital and streaming.

Leverage turns a slow decline into a sharper risk. Nexstar carries about $11.8 billion of net debt, roughly 13 times trailing operating income, against just $379 million of liquid assets. Interest coverage near 9.5 times looks fine while cash flow is strong, but a melting-revenue base plus a fixed, heavy debt load is exactly the combination that compresses equity value faster than the revenue decline alone suggests. The TEGNA deal, if it closes, adds scale but likely adds debt too, and it still has to clear an FCC review that is not guaranteed. The bear does not need broadcasting to collapse; it needs only the subscriber base to keep shrinking faster than rate increases can offset, with a debt load that leaves little room for error.

Valuation

The bet embedded in the price is, paradoxically, a modest one once you account for the cycle. Working the price backward, the market is asking Nexstar's operating profit to do almost nothing, essentially flat to slightly negative growth, because the current operating margin of 17.5% is already well above the roughly 6% the price would require it to settle at. In other words, the price does not need growth; it needs the cash flows to hold up. That is why the price looks like a within-range bet on the durability lens even though the static methods read the stock as expensive: the two systems are measuring different things, one the trailing snapshot, the other the assumption about whether the cash flows persist.

The static methods, though, are uniform in one direction. Every family lands below the price. The asset methods sit near a third of it, the earnings-power methods around half, and the peer and forward-growth methods short of it as well. The single method that reaches the price gets there only by holding today's EBITDA multiple flat across the forecast, which is a bet on pay-TV durability dressed as a valuation. Read honestly, the spread says the price is supported not by what any standard method values, but by confidence that the retransmission engine and the political-ad cycle keep the cash flowing. A reader should weigh that the asset and earnings lenses, the conservative ones, are unanimous on the downside.

The decisive factor is leverage layered on a cyclical, structurally pressured revenue base. Net debt of $11.8 billion against $379 million of liquid assets, roughly 13 times operating income, means the equity is the thin slice above a large fixed claim. Interest coverage near 9.5 times is comfortable today, but the comfort depends on distribution revenue continuing to reprice ahead of subscriber losses. The aggressive buyback, shrinking the share count about 7% a year, is the lever working in the shareholder's favor, concentrating the cash flow into fewer shares. The valuation is ultimately a judgment on which moves faster: the per-share cash flow compounding from buybacks, or the per-subscriber erosion of the pay-TV base.

Catalysts

The largest catalyst is the proposed TEGNA acquisition. Nexstar awaits regulatory approval and the ability to file its transfer-of-control documents with the FCC for the merger. A clearance would materially expand the station footprint and the retransmission base; a block or a prolonged review keeps the strategy on hold. This is the single binary event most likely to move the stock.

The second is the political ad cycle resetting. The 2025 odd-year results show the off-year trough: third-quarter net revenue fell 12.3% to $1.20 billion, with political advertising collapsing to $10 million from election-year levels, and second-quarter revenue down 3.2% to $1.23 billion on the same dynamic. The 2026 midterm cycle should reverse much of that, and the swing between off-year and election-year revenue is the rhythm to model rather than to read as a trend.

The third is capital return. Nexstar returned about $820 million to shareholders in the period, lifted the quarterly dividend 10% to $1.86 per share, and added $1.5 billion to its buyback authorization, all funded by cash on hand. With the share count already shrinking around 7% annually, the pace of repurchases and the trajectory of distribution-revenue renewals are the ongoing signals of whether per-share cash flow keeps compounding faster than the pay-TV base shrinks.

Peer Cohorts (Per Segment, With Filing Citations)

Broadcast (reported)

• FOX (FOX CORPORATION)
• FY2025 10-K: …primary competitors to FS1, FS2, and the Big Ten Network are ESPN, ESPN2, TNT, TBS, USA Network, CBS Sports Network and The CW Network; league-owned networks such as NFL Network, NHL Network, NBA TV and MLB Network; collegiate conference-specific networks such as the SEC Network and ACC Network; and…
• FY2025 10-K: FOX Nation, an SVOD service that offers U.S. consumers a variety of content including original programming, and FOX Weather, a FAST service that offers local, regional and national weather reporting in addition to live programming. The Big Ten Network distributes live-streaming and video-on-demand programming through…
• FOXA (FOX CORPORATION)
• FY2025 10-K: …primary competitors to FS1, FS2, and the Big Ten Network are ESPN, ESPN2, TNT, TBS, USA Network, CBS Sports Network and The CW Network; league-owned networks such as NFL Network, NHL Network, NBA TV and MLB Network; collegiate conference-specific networks such as the SEC Network and ACC Network; and…
• FY2025 10-K: FOX Nation, an SVOD service that offers U.S. consumers a variety of content including original programming, and FOX Weather, a FAST service that offers local, regional and national weather reporting in addition to live programming. The Big Ten Network distributes live-streaming and video-on-demand programming through…
• PSKY (Paramount Skydance Corporation)
• FY2025 10-K: Boxing events. Paramount+ enables subscribers to stream local CBS Stations live across the U.S., in addition to CBS News 24/7 and CBS Sports HQ and CBS Sports Golazo Network. Paramount+ is available in two tiers in the U.S.: Paramount+ Premium, our advertising-free (except during livestreamed and other limited…
• FY2025 10-K: …owned television stations (known as retransmission fees) and (ii) fees received from television stations owned by third parties for their affiliation with the CBS Television Network; and (3) the licensing and distribution of our content and other rights. Broadcast CBS Television Network. The CBS Television Network…
• FWONA (LIBERTY MEDIA CORPORATION)
• FY2025 10-K: …Paddock Club hospitality (other than at three Formula 1 Events) and commercial use of the name of the Formula 1 Event and circuit. In a few cases a cash payment is made for the grant of these circuit rights and in others Formula 1 offers a commission or share of revenue to a race promoter where they have been…
• FY2025 10-K: …and other equipment used in the production of live television images and also in live radio communications used by Formula 1, the FIA, the Formula 1 Teams (including car to pit radio transmissions) and the emergency services. Such radio frequency permits are obtained by a dedicated unit in the television production…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.