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1. Company Snapshot

1.a. Company Description

Saga Communications, Inc., a broadcast company, acquires, develops, and operates broadcast properties in the United States.The company's radio stations employ various programming formats, including classic hits, adult hits, top 40, country, country legends, mainstream/hot/soft adult contemporary, pure oldies, classic rock, and news/talk.As of February 28, 2022, it owned seventy-nine FM, thirty- four AM radio stations, and seventy-nine metro signals serving twenty-seven markets.


The company was founded in 1986 and is headquartered in Grosse Pointe Farms, Michigan.

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1.b. Last Insights on SGA

Recent drivers behind Saga Communications' performance include: * Decreased net revenue by 3.5% to $28.1 million in Q3 2024 compared to the same period last year, primarily due to increased station operating expense. * Station operating income (a non-GAAP financial measure) decreased 21.2% to $6.0 million in Q3 2024. * Operating income was $1.6 million in Q3 2024, down from $3.5 million in the same quarter last year. * Capital expenditures were $625 thousand in Q3 2024, down from $760 thousand in the same period last year. * Net income was $1.3 million in Q3 2024, down from $2.7 million in the same quarter last year. * Diluted earnings per share were $0.20 in Q3 2024. These factors suggest a decline in the company's financial performance, which may be attributed to increased expenses and decreased revenue.

1.c. Company Highlights

2. Saga Communications' Q3 2025 Earnings: A Mixed Bag

Saga Communications reported a net revenue decrease of $528,000 or 1.8% to $28.2 million in Q3 2025 compared to $28.7 million last year. The decline was primarily driven by a $1.8 million or 6.8% decrease in gross broadcast revenue, partially offset by a $1.1 million or 32.6% increase in gross interactive revenue. The company reported an operating loss of $626,000 and station operating income of $3.5 million. For the 9-month period ended September 30, 2025, net revenue decreased $3.1 million or 3.7% to $80.6 million, with station operating income of $11.7 million and an operating loss of $1.5 million. The actual EPS came out at -$0.08, missing estimates of $0.21.

Publication Date: Nov -29

📋 Highlights
  • Revenue Decline:: Q3 2025 net revenue fell $528K (1.8%) to $28.2M, driven by a $1.8M (6.8%) drop in broadcast revenue, partially offset by $1.1M (32.6%) interactive revenue growth.
  • Operating Loss:: Q3 operating loss widened to $626K, despite $3.5M station operating income, due to $2M surge in station operating expenses from music licensing settlements.
  • Asset Sale Proceeds:: Telecommunications tower sale closed for $10.7M, generating $8.7M net proceeds, reflecting strategic capital allocation rather than financial need.
  • Digital Momentum:: Interactive revenue grew 32.6% YoY in Q3 with 54% profit margin, aligning with the 18–24 month goal to double gross revenue via digital transformation.

Revenue Mix and Expenses

The revenue decline was largely attributed to the decrease in gross broadcast revenue, which was partially offset by the growth in gross interactive revenue. Station operating expense increased $2 million to $24.7 million, primarily due to an industry-wide settlement with music licensing organizations. The company's interactive revenue growth is a positive sign, with a 54% profit margin, indicating a successful digital transformation strategy.

Digital Transformation and Outlook

Saga is focused on its digital transformation, aiming to achieve 2x gross revenue, mostly digital, in 18 to 24 months. The company's interactive revenue increased 32.6% in Q3 2025 and 17.1% for the 9-month period. Pacing for the fourth quarter is tough, with a decline of approximately 11% including political and 4.7% when political is excluded. However, interactive pacing is strong for the fourth quarter, up 32%. The CEO believes that the radio spot advertising weakness is a delayed reaction to rate cuts on Main Street, rather than an anomaly.

Valuation and Dividend

The company's valuation metrics indicate a relatively attractive dividend yield of 8.47%. The P/S Ratio is 0.68, suggesting a reasonable valuation relative to sales. Saga has paid over $140 million in dividends to shareholders since 2012 and has bought back over $58 million in Saga stock. The company recently sold telecommunications towers and related property for a total cash purchase price of approximately $10.7 million, with net proceeds of approximately $8.7 million, which is expected to be used for buybacks.

Future Prospects

Analysts estimate next year's revenue growth at 4.5%. The company's strong cash position, with $26.3 million in cash and short-term investments as of September 30, 2025, and $34.2 million as of November 3, 2025, provides a solid foundation for future investments and dividend payments. The expected capital expenditures for 2025 are between $3.25 million to $3.75 million, and station operating expense is anticipated to be flat for the year compared to 2024.

3. NewsRoom

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Saga Communications, Inc. Announces Investor Conference Presentation

Dec -01

Source: globenewswire.com

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Gray Media (NYSE:GTN) and Saga Communications (NASDAQ:SGA) Critical Analysis

Nov -30

Source: defenseworld.net

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Contrasting Saga Communications (NASDAQ:SGA) and WhereverTV Broadcasting (OTCMKTS:TVTV)

Nov -18

Source: defenseworld.net

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Saga Communications, Inc. Declares a Quarterly Cash Dividend of $0.25 per Share

Nov -13

Source: globenewswire.com

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Virtus SGA International Growth Q3 2025 Portfolio Activity

Nov -11

Source: seekingalpha.com

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Virtus SGA International Growth Q3 2025 Contributors And Detractors

Nov -11

Source: seekingalpha.com

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Virtus SGA Global Growth Q3 2025 Contributors And Detractors

Nov -09

Source: seekingalpha.com

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Virtus SGA Global Growth Q3 2025 Portfolio Positioning

Nov -09

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.55%)

6. Segments

Broadcast Advertising

Expected Growth: 2.5%

Saga Communications' 2.5% growth in Broadcast Advertising is driven by increasing demand for targeted advertising, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital media and podcasting is attracting new advertisers, while its strong relationships with local businesses and events are driving revenue growth.

Digital Advertising

Expected Growth: 3.5%

Saga Communications, Inc.'s 3.5% growth in Digital Advertising is driven by increasing demand for targeted online ads, expansion of digital marketing budgets, and growing popularity of social media platforms. Additionally, the company's focus on mobile-first strategies, programmatic advertising, and data analytics capabilities also contribute to this growth.

Other

Expected Growth: 2.0%

Saga Communications, Inc.'s 2.0% growth in 'Other' segment is driven by increasing demand for digital marketing services, expansion of its digital agency, and growing revenue from its online platforms. Additionally, strategic acquisitions and partnerships have contributed to the growth, along with a focus on cost savings initiatives and operational efficiencies.

7. Detailed Products

Radio Broadcasting

Saga Communications, Inc. owns and operates a diverse group of radio stations across the United States, offering a range of formats including news, talk, sports, and music.

Television Broadcasting

Saga Communications, Inc. also owns and operates several television stations, providing local news, sports, and entertainment programming.

Digital Media

Saga Communications, Inc. offers a range of digital media services, including website design, development, and hosting, as well as digital advertising and marketing solutions.

Tower Rental and Management

Saga Communications, Inc. owns and operates a portfolio of broadcast towers, offering rental and management services to other broadcasters and wireless communication providers.

8. Saga Communications, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Saga Communications, Inc. operates in a highly competitive industry, but the threat of substitutes is mitigated by the company's diversified revenue streams and strong brand recognition.

Bargaining Power Of Customers

Saga Communications, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand recognition and high-quality services reduce the likelihood of customers switching to competitors.

Bargaining Power Of Suppliers

Saga Communications, Inc. relies on a few key suppliers for its broadcasting and digital operations. While the company has some bargaining power due to its size and reputation, suppliers may still exert some pressure on prices and terms.

Threat Of New Entrants

The broadcasting and digital media industries have high barriers to entry, including significant capital requirements and regulatory hurdles. This reduces the threat of new entrants and allows Saga Communications, Inc. to maintain its market position.

Intensity Of Rivalry

The broadcasting and digital media industries are highly competitive, with many established players and new entrants vying for market share. Saga Communications, Inc. must continually innovate and invest in its operations to maintain its competitive edge.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 5.12%
Debt Cost 3.95%
Equity Weight 94.88%
Equity Cost 6.22%
WACC 6.10%
Leverage 5.40%

11. Quality Control: Saga Communications, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Gray Television

A-Score: 6.5/10

Value: 9.6

Growth: 8.3

Quality: 4.9

Yield: 9.0

Momentum: 5.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Deluxe

A-Score: 5.8/10

Value: 7.9

Growth: 3.3

Quality: 4.6

Yield: 9.0

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Townsquare Media

A-Score: 5.5/10

Value: 9.3

Growth: 3.7

Quality: 4.6

Yield: 9.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Saga Communications

A-Score: 5.4/10

Value: 6.9

Growth: 1.9

Quality: 5.1

Yield: 10.0

Momentum: 2.0

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Entravision

A-Score: 5.1/10

Value: 6.9

Growth: 2.7

Quality: 2.2

Yield: 10.0

Momentum: 6.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Beasley Broadcast Group

A-Score: 2.7/10

Value: 8.2

Growth: 2.7

Quality: 3.4

Yield: 0.0

Momentum: 0.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.63$

Current Price

11.63$

Potential

-0.00%

Expected Cash-Flows