# Nexstar Media Group Inc. (NXST) — Financial Analysis

**Exchange:** NASDAQ  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-27  
**Tier:** Free primer (step 2 of 19)  
**Sibling pages:** /stocks/NXST/thesis · /stocks/NXST/memo

## Financial Snapshot

---
ticker: NXST
step: "04"
generated: 2026-05-27
source: coverage-next-full
---

### Nexstar Media Group (NXST) — Step 04: Financial Quality & Adversarial Sweep

#### Key Findings

**Net Assessment: POSITIVE financial quality; no material adversarial concerns.** Nexstar's financial statements are straightforward for a media company — heavy goodwill/intangibles from acquisitions (normal for the sector), consistent cash conversion, and no accounting red flags. The Adversarial Research Sweep found no short reports targeting NXST, no SEC investigations, and no material litigation that would impair financial integrity. The main financial quality concern is leverage (~3.2x pre-TEGNA, ~4.0x post), which is manageable but warrants monitoring [S1][S2].

**NOTE**: This step uses filings + press releases only. No earnings transcript analysis performed (coverage-next-full path).

#### Implications for Thesis and Valuation

- GAAP net income is a poor quality metric for NXST due to large D&A from intangibles amortization ($800-815M/year); adjusted EBITDA and FCF are the correct metrics to value this business
- Balance sheet has $7.4B in intangibles + goodwill (FY2025) representing 68% of total assets — standard for acquisition-driven media company; not a quality concern per se but worth noting
- The TEGNA acquisition adds ~$3.6-4B more in goodwill/intangibles at Q1 2026 — total assets expanded from $10.8B to $18.1B [S3]
- Interest coverage is adequate: FY2024 EBITDA of $2.08B vs. ~$380M interest = ~5.5x; FY2025 $1.63B EBITDA vs. ~$395M interest = ~4.1x — comfortably above typical covenant thresholds
- No material restatements, audit qualifications, or regulatory sanctions found

#### Objective

Assess financial statement quality, adjustments needed, accounting conservatism, and conduct the mandatory Adversarial Research Sweep.

#### Narrative Analysis

##### Accounting Quality Assessment

**Revenue Recognition**: Retransmission revenue is recognized ratably over contract periods (subscription-model accounting). Advertising revenue is recognized when spots air. Both are straightforward and low-risk [S1].

**Intangibles and Goodwill**: Nexstar carries ~$4.5B in FCC licenses and other intangibles plus ~$2.9B in goodwill (FY2025 standalone). These are amortized ($800-815M/year D&A), creating a significant gap between GAAP earnings and economic earnings. This is standard for the industry — FCC licenses are perpetually renewable and arguably appreciate in value rather than declining. The aggressive amortization is actually conservative accounting that suppresses GAAP EPS; adjusted EBITDA/FCF are more representative metrics [S1][S4].

**Cash Flow vs. Earnings**: Operating cash flow consistently exceeds net income by a large margin:
- FY2024: Net income $722M vs. operating cash flow $1,250M (ratio: 1.73x) — confirming earnings quality
- FY2025: Net income $109M vs. operating cash flow $891M (ratio: 8.2x) — even more extreme in off-year
This high cash conversion rate is a positive quality indicator [S2].

**SBC**: Estimated ~$40-60M/year in stock-based compensation (primarily RSUs to Perry Sook and senior management). Modest as a % of EBITDA (<4%); not a material concern.

**Pension/OPEB**: No significant pension obligations disclosed. Broadcast companies generally do not have large legacy pension liabilities.

##### Balance Sheet Quality

The balance sheet is typical for a company that has grown primarily through acquisitions:
- 68% of FY2025 total assets are intangibles + goodwill
- Long-term debt was ~$6.4B pre-TEGNA, ~$12.2B post-TEGNA (Q1 2026)
- Shareholders' equity has eroded from $2.9B (FY2021) to $2.1B (FY2025) as buybacks and GAAP losses reduce book value
- Working capital is modestly negative (standard for media companies with significant current liabilities from accrued compensation and deferred revenue)

**Debt Quality**: Pre-TEGNA debt consisted of Term Loan A, Term Loan B, and senior notes — all refinanced in June 2025 with extended maturities (2030-2032 range). The refinancing was proactive and credit-positive: extended maturities, reduced spreads, and demonstrated market access at reasonable rates [S5].

##### Key Financial Ratios

| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|--------|--------|--------|--------|--------|
| Gross Margin (Adj.) | ~63% | ~56% | ~63% | ~55% |
| EBITDA Margin | 37.9% | 33.4% | 38.4% | 33.0% |
| Interest Coverage (EBITDA/Int.) | ~5.6x | ~4.3x | ~5.5x | ~4.1x |
| Net Debt/EBITDA | ~3.5x | ~4.1x | ~3.1x | ~3.7x |
| FCF Conversion (FCF/EBITDA) | 63% | 52% | 53% | 45% |
| Current Ratio | ~0.8-1.0 | ~0.7-0.9 | ~0.9 | ~1.0 |

#### Adversarial Research Sweep

**Search Scope**: Short seller reports, SEC investigations, material litigation, regulatory sanctions, forensic accounting flags.

##### Short Seller Activity
No material short seller reports targeting NXST found. Short interest has been moderate (estimated 5-8% of float) reflecting macro concerns about leverage and cord-cutting, not specific accounting allegations [S6].

##### SEC/Regulatory Actions
No SEC enforcement actions, Wells notices, or material regulatory sanctions found against Nexstar Media Group in the 2021-2025 period. SEC filings are current and unqualified [S4].

##### Material Litigation
1. **TEGNA Hold-Separate Injunction**: A federal court issued a preliminary injunction in early 2026 prohibiting further integration of NXST and TEGNA pending unrelated litigation. This is an operational constraint, not a financial integrity issue [S7].
2. **Retransmission Disputes**: Periodic carriage disputes with MVPDs (e.g., DirecTV) are normal for broadcasters and are resolved through renegotiation. None represent material financial risk at this time.
3. **Perry Sook Related-Party**: Proxy discloses ~$97K aircraft reimbursement to Sook annually. Immaterial in dollar terms; noted as disclosure flag but not a red flag.

##### Accounting Red Flags Checklist

| Flag | Status | Notes |
|------|--------|-------|
| Revenue recognition anomalies | NONE | Straightforward retransmission + advertising recognition |
| Accounts receivable growth outpacing revenue | NONE | AR grows proportionally with revenue |
| Gross margin deterioration | WATCH | Declining in off-years due to fixed programming costs; structural |
| Working capital manipulation | NONE | Cash conversion consistent with reported earnings |
| Auditor qualifications or changes | NONE | Clean audit opinions; stable auditor relationship |
| Related party transactions | MINOR | Aircraft reimbursement to Sook (~$97K/year); immaterial |
| Restatements or corrections | NONE | No material restatements in 2021-2025 period |
| Channel stuffing / bill-and-hold | N/A | Not applicable to broadcast advertising model |
| Off-balance sheet liabilities | WATCH | Operating lease obligations; network affiliation commitments |

**Overall Adversarial Assessment: CLEAN.** No material concerns. Standard acquisition-driven intangibles and leverage profile.

#### Evidence and Sources

##### Operating Cash Flow vs. Net Income

| Year | Net Income | Operating CF | Ratio | FCF |
|------|-----------|-------------|-------|-----|
| FY2021 | $834M | $1,215M | 1.46x | $1,064M |
| FY2022 | $971M | $1,403M | 1.44x | $1,246M |
| FY2023 | $346M | $999M | 2.89x | $850M |
| FY2024 | $722M | $1,250M | 1.73x | $1,105M |
| FY2025 | $109M | $891M | 8.18x | $743M |

The consistently high cash-to-earnings ratio confirms genuine FCF generation despite GAAP accounting adjustments.

##### D&A as Key Adjustment

| Year | D&A ($M) | % of Revenue | EBITDA | Net Income | EBITDA/NI Ratio |
|------|---------|-------------|-------|-----------|----------------|
| FY2022 | ~$662 | 12.7% | $1,974 | $971 | 2.03x |
| FY2023 | ~$941 | 19.1% | $1,649 | $346 | 4.76x |
| FY2024 | ~$808 | 14.9% | $2,076 | $722 | 2.88x |
| FY2025 | ~$785 | 15.9% | $1,634 | $109 | 15.0x |

The extreme EBITDA/NI ratio in FY2025 reflects $450M lower political revenue + TEGNA deal costs, not accounting manipulation.

#### Assumption Register Updates

No new significant assumptions added. Interest expense estimates are in the register from Step 00 work.

#### Open Questions and Data Gaps

1. Exact reverse retransmission costs (paid to networks) — not disclosed; reduces net retransmission economics
2. CW Network detailed P&L — losses narrowing but detail limited
3. Post-TEGNA purchase price allocation — goodwill and intangibles from TEGNA will drive additional D&A in FY2026+
4. TEGNA-specific contingent liabilities (the litigation that triggered the hold-separate order)

#### Source Index

| Source Tag | Document or URL | Section | Date | Notes |
|-----------|----------------|---------|------|-------|
| [S1] | StockAnalysis.com/stocks/nxst | Annual financials | 2026-05-27 | P&L, margins, revenue recognition context |
| [S2] | StockAnalysis.com/stocks/nxst cash flow | Cash flow statement | 2026-05-27 | Operating CF vs. net income comparison |
| [S3] | StockTitan / Seeking Alpha Q1 2026 | Q1 2026 balance sheet | 2026-05-27 | Total assets $18.1B post-TEGNA |
| [S4] | SEC EDGAR filings (CIK 0001142417) | Annual and quarterly filings | 2026-05-27 | Clean audits; no qualifications |
| [S5] | Nexstar press release — credit refinancing | June 30, 2025 | 2025-06-30 | New TLA/TLB/revolver extended to 2030-32 |
| [S6] | MarketBeat / short interest data | Short interest | 2026-05-27 | Estimated 5-8% of float; macro-driven |
| [S7] | Wikipedia — Merger of Nexstar and TEGNA | Hold-separate injunction | 2026-05-27 | Federal court injunction; integration constrained |

## Deeper Financial Analysis

The fundamental tier ($1.00) adds 8 dimensions not included here:

- Revenue Breakdown — segment revenue, geographic mix, product-line margins
- Financial Trends — QoQ momentum, leading indicators, inflection points
- Balance Sheet — debt structure, dilution risk, working capital dynamics
- Capital Allocation — ROIC, buyback cadence, reinvestment efficiency
- Earnings Analysis — beats/misses, guidance vs actuals, transcript highlights
- Competitive Positioning — market share, pricing power, peer benchmarks
- Industry Context — TAM, sector tailwinds/headwinds, regulatory backdrop

**API endpoint:** GET /api/v1/research/NXST/fundamental

## Navigation

- Overview: /stocks/NXST
- Financials (this page): /stocks/NXST/financials
- Thesis: /stocks/NXST/thesis
- Investment Memo: /stocks/NXST/memo
- Coverage universe: /stocks