Does Nexstar Media Group (NASDAQ: NXST) deserve a spot on your watchlist?


Like a puppy chasing its tail, some new investors often chase “the next big thing,” even if that means buying “history stocks” with no income, let alone profit. But the reality is that when a business loses money every year, for long enough, its investors will usually take their share of those losses.

So if you’re like me, you might be more interested in profitable and growing businesses like Nextstar Media Group (NASDAQ: NXST). Now, I’m not saying the title is necessarily undervalued today; but I cannot shake an appreciation of the profitability of the company itself. Conversely, a loss-making company has yet to prove itself with profit, and eventually the sweet milk of external capital can turn sour.

How fast is Nexstar Media Group growing?

The market is a short-term voting machine, but a long-term weighing machine, so the stock price eventually follows earnings per share (EPS). Therefore, many investors like to buy stocks of companies with growing EPS. It is certainly nice to see that Nexstar Media Group has managed to increase its EPS by 20% per year over three years. If the company can support this kind of growth, we expect shareholders to come out ahead.

I like to look at earnings before interest and tax margins (EBIT), as well as revenue growth, to get another idea of ​​how well the business is growing. Nexstar Media Group shareholders can be confident that EBIT margins have increased from 27% to 30% and revenues are growing. It’s great to see, on both counts.

You can take a look at the company’s revenue and profit growth trend, in the graph below. Click on the graph to see the exact numbers.

NasdaqGS: NXST Revenue and Revenue History December 13, 2021

Fortunately, we have access to analyst forecasts from Nexstar Media Group future profits. You can make your own predictions without looking, or you can take a look at what the pros are predicting.

Are Nexstar Media Group Insiders Aligned with All Shareholders?

Since Nexstar Media Group has a market capitalization of US $ 6.3 billion, we don’t expect insiders to own a large percentage of shares. But we are reassured by the fact that they have invested in the company. Indeed, they have invested a sparkling mountain of wealth, currently valued at US $ 269 million. This suggests to me that management will be very attentive to the interests of shareholders when making a decision!

Should you add Nexstar Media Group to your watchlist?

Given my belief that the stock price tracks earnings per share, you can easily imagine what I think of Nexstar Media Group’s strong EPS growth. Additionally, the high level of insider ownership impresses me and suggests that I am not the only one enjoying the growth of BPA. Rapid growth and confident insiders should be enough to warrant further research. So the answer is, I think it’s a good stock to follow. It is also necessary to consider the ever-present specter of investment risk. We have identified 3 warning signs with Nexstar Media Group (at least 1 which is potentially serious), and understanding them should be part of your investment process.

While Nexstar Media Group certainly looks good to me, I would like more insiders to buy stocks. If you also like to see insiders buy, then this free list of growing companies that insiders are buying, might be exactly what you are looking for.

Please note that the insider trading discussed in this article refers to reportable trades in the relevant jurisdiction.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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