Breaking Down Nexstar Media Group, Inc. (NXST) Financial Health: Key Insights for Investors

You're looking at Nexstar Media Group, Inc. (NXST) right now, and the headline numbers from their Q3 2025 report-released just this November-tell a story of cyclical contraction but strategic muscle, so you need to look past the dip. Yes, the non-election year slump hit hard: Q3 Net Revenue was $1.198 billion, a 12.3% decrease year-over-year, and Net Income plummeted 63.9% to $65 million. But here's the quick math: the core business is stable, and the company is defintely playing the long game, using its strong balance sheet-consolidated debt is manageable at $6.4 billion as of September 30, 2025-to fund massive, accretive growth. I'm talking about the definitive, $6.2 billion agreement to acquire TEGNA Inc., a move analysts expect will boost adjusted free cash flow by over 40%. This is a classic media play: scale up during a trough to capture the next upswing, especially with the 2026 mid-term political advertising cycle on the horizon. Wall Street sees it, too, with a consensus price target hovering around $225.00 to $242.33.

Revenue Analysis

You're looking at Nexstar Media Group, Inc. (NXST) and seeing a dip in the top line, and the direct takeaway is this: the company's revenue stability is shifting from volatile advertising to the more predictable, contractual income stream of distribution. The 2025 fiscal year is an off-cycle year for political advertising, so the overall net revenue is projected to be around $5.03 billion, according to analyst models, which is a decline from the prior election year's high.

The primary revenue sources for Nexstar Media Group, Inc. are clearly split into two main buckets: Distribution Revenue and Advertising Revenue. Distribution Revenue-which is essentially retransmission consent fees (the money cable and satellite companies pay to carry their local stations) and over-the-top (OTT) video providers (vMVPDs)-is the bedrock. Advertising Revenue is the more cyclical and volatile component, comprising both core non-political advertising and the massive, but biennial, political ad spend. This is a media company, so the revenue mix is everything.

The year-over-year revenue growth rate for 2025 reflects the predictable political cycle drop. For the first nine months of 2025 (Q1-Q3), the net revenue has seen a decline, with the trailing twelve months (TTM) revenue as of Q3 2025 at approximately $5.15 billion, representing a year-over-year decrease of about 1.47%. The Q3 2025 net revenue alone was $1.20 billion, a sharp 12.3% decrease from the same period last year. The political advertising cycle is a beast.

Here is a quick breakdown of the segment contributions for the first half of 2025:

• Distribution Revenue: This segment is the most stable, driven by annual rate escalators and growth in virtual multichannel video programming distributor (vMVPD) subscribers, which helps offset traditional cable subscriber attrition. Q1 2025 saw record distribution revenue of $762 million, a marginal 0.1% increase year-over-year.
• Advertising Revenue: This is where the major change is. Q1 2025 Advertising Revenue was $460 million, a 10.2% drop year-over-year. Q3 2025 Advertising Revenue fell 23.5% to $476 million.

The significant change in revenue streams is the massive drop in political advertising, a factor you must defintely account for in your valuation models. In Q1 2025, political advertising revenue plummeted by $32 million year-over-year, landing at just $6 million. This drop is the primary driver of the overall revenue decline for the year. The core, non-political advertising revenue has shown more resilience, described as effectively flat year-over-year in Q3 2025, which suggests the underlying business is holding steady outside of the political noise. This stability in core advertising, coupled with the reliable distribution revenue, is what underpins the company's financial health, which we break down further in Breaking Down Nexstar Media Group, Inc. (NXST) Financial Health: Key Insights for Investors.

To see the split clearly, look at the quarterly contribution:

The key action for you is to model Nexstar Media Group, Inc.'s 2026 revenue with a significant spike in political advertising, as that's when the next election cycle hits, and the revenue numbers will look dramatically different again. This year is just the low-water mark before the next wave.

Profitability Metrics

You want to know if Nexstar Media Group, Inc. (NXST) is making money efficiently, especially in a tough media environment. The short answer is yes, but the profitability picture is getting more complex in 2025 due to the non-election year cycle. The company's margins are still significantly stronger than the broadcasting industry average, but the year-over-year (YoY) decline shows the pressure from a drop in high-margin political advertising.

Here's the quick math on the most recent quarterly results. For the third quarter of 2025, Nexstar Media Group reported $1.20 billion in net revenue. This translated to a net income of $65 million.

Industry average for Broadcasting as of November 2025, or nearest available forecast.

Gross Profit and Operational Efficiency

The company maintains a strong gross profit margin, which is the first sign of operational health. In Q2 2025, Nexstar Media Group achieved a gross profit margin of approximately 59%. This is a massive outperformance compared to the broader broadcasting industry average of just 37.8%. This means their core business-the cost of goods sold (COGS), which includes programming and production costs-is extremely well-managed. They are defintely a high-margin business.

Moving down the income statement, the Adjusted EBITDA margin (Earnings Before Interest, Taxes, Depreciation, and Amortization, adjusted for one-time items) is a powerful proxy for operational profit in media. Nexstar Media Group's Q2 2025 Adjusted EBITDA margin was 31.7%. This level of operational efficiency dwarfs the industry's expected operating margin of around 15% by 2026-2027. This gap shows the strength of their local-to-national scale and their focus on cost controls, which offset the lower revenue from political ads.

Profitability Trends and Risks

The trend over the past year has been one of contraction, which is expected in a non-election year. The Q2 2025 Net Income Margin dropped to 7.4% from 8.4% in the prior year period. The Q3 2025 margin of 5.4% continues this trend. What this estimate hides is the five-year trend where the operating margin has been in a steady decline, averaging a -1.9% decrease per year. This is the long-term risk: the core business is highly profitable, but the margin is slowly eroding as the industry shifts.

The primary driver for the 2025 decline is the cyclical nature of political advertising, which is a high-margin revenue stream that largely disappears in odd-numbered years. However, management has been proactive in mitigating this, noting that strong expense management helped offset the lower revenue. Their strategic focus on growing The CW Network (now ranked #8 in total audience) and NewsNation (fastest-growing cable news network) is part of their long-term plan to diversify revenue and stabilize margins away from the election cycle volatility. You can learn more about their long-term goals by reading the Mission Statement, Vision, & Core Values of Nexstar Media Group, Inc. (NXST).

• Maintain strong gross margins by controlling production costs.
• Expect net margins to rebound sharply in the 2026 election cycle.
• Watch the long-term operating margin trend for structural weakness.

The key action for you is to model Nexstar Media Group's profitability over a two-year cycle, not just a single quarter, to account for the political ad volatility. Look for continued strength in their distribution revenue ($733 million in Q2 2025), as that is the stable, recurring income that supports the high operational margins.

Debt vs. Equity Structure

The short answer is Nexstar Media Group, Inc. (NXST) leans heavily on debt to fuel its operations and growth, which is common for capital-intensive media companies, but its leverage ratio is high compared to the industry average. As of the third quarter of 2025, the company's Debt-to-Equity (D/E) ratio stood at 2.80. This signals a significant reliance on borrowed capital over shareholder equity, a classic financial leverage strategy.

You need to see the raw numbers to understand the scale. Here's the quick math on their financing mix as of September 30, 2025, showing a consolidated debt of $6.4 billion against total equity of $2.286 billion. This leverage is what gives you that 2.80 D/E ratio. To be fair, this is a sector where companies often carry more debt, but if you look at the wider Broadcasting industry, the average D/E ratio is closer to 1.23. That means Nexstar Media Group, Inc. is running with more than double the industry's typical leverage.

• Total Consolidated Debt (Q3 2025): $6.4 billion
• Total Stockholders Equity (Q3 2025): $2,286 million
• Debt-to-Equity Ratio: 2.80

The company's debt structure is mostly long-term, which is a good thing for near-term liquidity. Their total long-term debt and capital lease obligations were $6,248 million in Q3 2025, with short-term obligations at a manageable $152 million. However, the real measure lenders watch is the Total Net Leverage Ratio, calculated under their credit agreement, which was 3.09x at the end of Q3 2025. This is well within their covenant limit of 4.25x, so they defintely have breathing room.

On the credit side, the company has maintained a non-investment grade, or speculative, rating, which is common for highly leveraged media firms. Their corporate credit rating is Ba3 from Moody's and BB+ from S&P. This rating reflects the high leverage but is balanced by their strong free cash flow generation and market position. The management team is actively managing this debt, too. In June 2025, they successfully refinanced their credit facilities, extending the maturity of their Term Loan B to 2032 and reducing interest rate margins by 10 to 11 basis points. That's smart treasury work, reducing future interest expense and pushing the maturity wall out.

The balance between debt and equity funding is a clear capital allocation strategy. Nexstar Media Group, Inc. is using its cash flow to service the debt, pay a strong dividend, and execute share buybacks, rather than issuing new equity. For example, in Q3 2025 alone, they used cash to repay $25 million of debt and paid out $56 million in dividends. They are focused on deleveraging while rewarding shareholders, a move that signals confidence in their future cash flow from distribution renewals and the upcoming political cycle. For a deeper look at who is buying into this strategy, check out Exploring Nexstar Media Group, Inc. (NXST) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You're looking at Nexstar Media Group, Inc. (NXST) to see if they can handle their short-term bills while still funding growth, which is the heart of liquidity analysis. The quick takeaway is that Nexstar's liquidity position is defintely strong, primarily driven by a very low reliance on inventory and a consistent ability to generate cash, even in a non-political advertising year like 2025.

The company's ability to cover its short-term obligations is excellent. As of November 2025 (Trailing Twelve Months), the Current Ratio stands at approximately 1.87. This means Nexstar has $1.87 in current assets for every dollar of current liabilities. What's more telling is that the Quick Ratio is also around 1.87. Since the Quick Ratio (acid-test ratio) excludes inventory, this near-identical figure confirms that virtually all of Nexstar's current assets are highly liquid, like cash and accounts receivable. That is a solid, low-risk position.

Working Capital and Near-Term Trends

Working capital-current assets minus current liabilities-has faced some pressure in 2025, but the overall trend remains manageable. The primary headwind is the cyclical nature of their business. In the third quarter of 2025, Net Revenue dropped 12.3% year-over-year, largely due to reduced political advertising revenue, which in turn impacts the cash conversion cycle and operating assets. Here's the quick math: lower revenue means less cash coming in from accounts receivable, which tightens the operating assets side of working capital.

Still, the company's capital structure offers a huge buffer. Their First Lien Net Leverage Ratio was only 1.73x as of September 30, 2025, which is well below their covenant of 4.25x. This low leverage gives them significant financial flexibility (solvency) to manage any working capital fluctuations. They are not beholden to lenders. For a deeper dive into who is buying their stock, you should check out Exploring Nexstar Media Group, Inc. (NXST) Investor Profile: Who's Buying and Why?

Cash Flow: Operations, Investing, and Financing

The cash flow statement for 2025 shows a mixed, but strategic, picture. Operating Cash Flow (OCF) for the nine months ended September 30, 2025, was $701 million, a 16.4% decrease from the comparable period in 2024, again largely tied to the non-election year political ad cycle. But, they are using the cash they do generate very deliberately. That is the key. They are consistently allocating capital to three areas: debt reduction, dividends, and share buybacks.

• Operating Cash Flow (OCF): The Q3 2025 OCF was $117 million. This is lower, but still positive, cash generation.
• Financing Activities: Nexstar repaid $25 million of debt in Q3 2025 and paid $56 million in dividends. In Q2 2025, they repaid $101 million of debt and repurchased $50 million of stock. They are actively managing their debt load.
• Investing Activities: Major investing activity includes the definitive agreement to acquire TEGNA Inc. for $6.2 billion, announced in Q3 2025. This is a massive, strategic move that will be financed but is expected to be accretive to future free cash flow.

What this all tells you is that while OCF is down due to a predictable revenue cycle, management is using their strong balance sheet and positive cash flow to execute a long-term strategy, including a major acquisition and consistent return of capital to shareholders. The current liquidity is strong, and the solvency position is excellent, which is what matters when the company is making a big strategic bet.

Valuation Analysis

You want to know if Nexstar Media Group, Inc. (NXST) is a buy, a hold, or a sell right now, and the simplest answer is that while the market sees it as a Moderate Buy, the valuation metrics suggest it's trading at a discount to its intrinsic value, especially when you look at its cash flow generation.

The core question-overvalued or undervalued-is best answered by looking at three key multiples, which, as of late 2025, paint a clear picture of a company with strong assets and earnings power that the market hasn't fully appreciated. Honestly, it looks undervalued.

• Price-to-Earnings (P/E) Ratio (Trailing): 9.74
• Price-to-Book (P/B) Ratio: 2.49
• Enterprise Value-to-EBITDA (EV/EBITDA) (TTM): 6.27

Here's the quick math: A trailing P/E ratio of 9.74 is low for the broader market, which suggests the stock is cheap relative to its past earnings. Plus, the forward P/E is even lower at 8.67, anticipating a dip in 2025 earnings due to the non-political year cycle, but still a very reasonable multiple. The EV/EBITDA of 6.27 is what I focus on for media companies with significant debt; it shows the company is priced very attractively relative to its core operating profit (Earnings Before Interest, Taxes, Depreciation, and Amortization), especially compared to the sector median, which is often higher. The P/B ratio of 2.49 is higher than 1.0, which is normal for a profitable, asset-heavy business, but not excessive. It's a solid balance.

Is NXST a Value Play?

The stock has had a volatile run over the last 12 months, which is common in the media space right now. Its 52-week range has been from a low of $141.66 to a high of $223.36. With the current price sitting around $186.64, it's well off its high, which is where the opportunity is. This volatility is partly driven by the uncertainty surrounding the media landscape and the potential for new acquisitions, like the proposed Tegna deal, which could be a game-changer if approved. If you want to dive deeper into the strategic direction, you should review the Mission Statement, Vision, & Core Values of Nexstar Media Group, Inc. (NXST).

The dividend story is strong, too. Nexstar Media Group, Inc. offers a compelling dividend yield of approximately 4.1% based on an annualized dividend of $7.44 per share. The payout ratio is very sustainable, sitting at about 46.1%. A payout ratio under 60% means the company is returning capital to shareholders while retaining plenty of earnings to reinvest in the business or pay down debt. That's defintely a sign of financial discipline.

Wall Street's consensus aligns with the value proposition. Of the nine analysts covering the stock, the consensus rating is a Moderate Buy, with seven of those ratings being a straight 'Buy'. The average 12-month price target is $225.00, which suggests a significant upside from the current price. Still, remember that political advertising revenue can cause big swings, so 2025's numbers are naturally softer than the 2024 election year.

Risk Factors

You're looking at Nexstar Media Group, Inc. (NXST) and seeing a cash-flow machine, but honestly, the near-term picture is a little messy. The biggest risk right now is not operational, it's regulatory and cyclical. The company's success hinges on two things: getting the TEGNA deal done and navigating the non-election year advertising slump. You need to watch those two levers defintely.

External and Industry Risks: The Regulatory Hurdle and Ad Cycle

The media landscape is changing fast, and Nexstar Media Group, Inc. (NXST) faces two massive external risks. First is the regulatory environment. The pending $6.2 billion acquisition of TEGNA is a game-changer, but it's still awaiting approval from the Federal Communications Commission (FCC) and the Department of Justice (DOJ). That regulatory uncertainty is a cloud over the stock, and any delay or rejection could significantly impact the projected value creation.

Second is the cyclical nature of advertising revenue. 2025 is an off-year, so we saw a massive drop in political ad spending. In Q3 2025, total net revenue declined by 12.3% year-over-year, largely because political advertising revenue was only around $10 million, a huge decrease from the comparable prior year quarter.

• Regulatory delay risks TEGNA acquisition.
• Cyclical ad drop hit Q3 2025 revenue hard.
• Cord-cutting pressures distribution revenue.

Operational, Financial, and Strategic Risks

Digging into the filings, the core operational and financial risks are clear. Distribution revenue, the stable bedrock, is under pressure from MVPD (Multichannel Video Programming Distributor) subscriber attrition, or cord-cutting. Q3 2025 distribution revenue was down 1.4% year-over-year to $709 million, a small but persistent headwind.

On the financial side, the company carries significant leverage. Its total net leverage ratio stood at 3.09x at the end of Q3 2025, with a debt balance of $6.4 billion. While management has been proactive in debt reduction and refinancing, that level of debt is a real risk if the advertising market weakens further or interest rates don't cooperate. Here's the quick math: a high debt load means more of your cash flow goes to interest payments, not growth or shareholder returns.

A more strategic concern is the competitive threat from digital media. Some analysts point to Nexstar Media Group, Inc.'s digital strategy as outdated, arguing that a focus on traditional linear TV is a long-term liability, even with digital assets like The CW and NewsNation. For a deeper dive into who is buying in spite of these risks, check out Exploring Nexstar Media Group, Inc. (NXST) Investor Profile: Who's Buying and Why?

Mitigation Strategies and Clear Actions

Management isn't sitting on its hands. They have clear plans to mitigate these risks. The TEGNA acquisition itself is a mitigation strategy, expected to generate $300 million in annual run-rate synergies, with 45% coming from retransmission revenue and 55% from operating expense reductions.

To counter the distribution and digital risks, they are aggressively transforming The CW network, shifting to a focus on live sports and programming, which helped The CW become the #8-ranked network in total audience for the first half of 2025. They are also focused on strong expense management, which helped Adjusted Free Cash Flow jump 31.2% to $101 million in Q2 2025, despite the revenue decline. Finally, they are simply waiting for the 2026 mid-term election cycle, which will bring a massive, predictable surge in political advertising revenue.

Growth Opportunities

You're looking past the current media noise to see where Nexstar Media Group, Inc. (NXST) is building its long-term foundation, and that's smart. The direct takeaway is that while the company is navigating a cyclical dip in 2025, its strategic investments and massive scale position it for a significant earnings rebound in 2026. Honestly, the near-term revenue picture is muted, with analysts modeling full-year 2025 sales around $5.03 billion, a drop from the prior election year's high, but the underlying moves are defintely bullish for the future.

The biggest lever for future growth is the pending acquisition of TEGNA Inc., a $6.2 billion cash transaction announced in August 2025. This isn't just about getting bigger; it's about market dominance. The deal is expected to be more than 40% accretive to Nexstar Media Group, Inc.'s stand-alone adjusted free cash flow and is projected to generate roughly $300 million in annual synergies by 2026. Here's the quick math: combining these two giants will expand Nexstar Media Group, Inc.'s reach to an estimated 80% of U.S. TV households, giving them unmatched leverage in distribution and advertising negotiations.

Beyond M&A, the company is aggressively transforming its national networks and investing in new technology, which are the core product innovations driving organic growth.

• The CW Network: Shifting 40% of its content to live sports, which helped boost NASCAR Xfinity Series viewership by 19% year-over-year in Q1 2025.
• NewsNation Expansion: The 24/7 news network saw a 67% viewership growth among key demographics in Q2 2025, enhancing its appeal to national advertisers.
• ATSC 3.0 (NextGen TV): Conversion of stations covering 50% of the U.S. population is mostly complete, opening up a new high-margin data transmission business that BIA Kelsey projects could generate up to $15 billion annually for the industry by 2030.

The reality check for 2025 is that non-political advertising has been soft, but the company's financial discipline remains strong. For instance, Q2 2025 saw a 31.2% increase in adjusted free cash flow to $101 million, even with a revenue decline, aided by cost cuts and refinancing. This is a business built to generate cash, with an average 2024/2025 Adjusted Free Cash Flow of around $1.05 billion.

What this estimate hides is the massive political advertising catalyst in 2026, which will be the real earnings driver. The 2025 numbers look like a trough year, but they are a necessary bridge to the next election cycle and the full realization of the TEGNA synergies.

To ground this discussion, look at the quarterly performance in 2025, which clearly shows the non-election year volatility but also the stability of distribution revenue.

Nexstar Media Group, Inc.'s competitive advantage boils down to its unmatched scale as the largest local television broadcast group, plus its commitment to local content. They employ 6,000 local journalists, producing over 316,000 hours of local programming a year. That local connection is hard to replicate, giving them a distinct edge over Big Tech and streaming rivals. For a deeper dive into the company's balance sheet and valuation, you should review Breaking Down Nexstar Media Group, Inc. (NXST) Financial Health: Key Insights for Investors.

Your next step should be modeling the 2026 political ad revenue, which will be the true test of this growth story.