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1. Company Snapshot

1.a. Company Description

TEGNA Inc.operates as a media company in the United States.The company operates television stations that deliver television programming and digital content.


It offers news content to consumers across various platforms, including online, mobile, and social platforms; owns and operates multicast networks under the names True Crime Network, Quest, and Twist that offer on-demand episodes of shows; and operates VAULT Studios, which provides true crime and investigative content in the form of podcasts and original television programs.The company also provides solutions for advertisers through TEGNA Marketing Solutions (TMS).TMS delivers results for advertisers across television and digital platforms, as well as over-the-top (OTT) platforms, including Premion OTT advertising network.


As of February 28, 2022, it operated 64 television stations in 51 markets.The company was formerly known as Gannett Co., Inc.and changed its name to TEGNA Inc.


in June 2015.TEGNA Inc.was founded in 1906 and is headquartered in Tysons, Virginia.

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1.b. Last Insights on TGNA

TEGNA Inc.'s recent performance was driven by strong Q2 earnings, beating estimates with $0.44 per share, and a solid quarterly dividend of 12.5 cents per share. The company's technical outlook improved with a "golden cross" formation, indicating a potential buy signal. Additionally, the proposed sale to Nexstar Media Group for $22.00 per share in cash may provide a positive catalyst. Several law firms, including Halper Sadeh LLC and Kahn Swick & Foti, LLC, are investigating the sale to ensure fairness to shareholders.

1.c. Company Highlights

2. TEGNA Navigates Headwinds with Digital Growth & Cost Control

TEGNA reported second-quarter revenue of $675 million, a 5% decline year-over-year. While this decrease was driven by lower political and AMS revenue, the company's digital segment continued its strong performance, achieving double-digit growth for the third consecutive quarter. Non-GAAP operating expenses decreased 3% year-over-year, thanks to cost-cutting initiatives. TEGNA also exceeded earnings expectations, with adjusted EPS coming in at $0.44, beating analyst estimates of $0.38.

Publication Date: Aug -09

📋 Highlights
  • Revenue Decline Amidst Cost Savings: Total revenue fell 5% YoY to $675M, driven by 4% AMS revenue drop to $288M and political revenue declines, while non-GAAP expenses decreased 3% due to cost-cutting.
  • Strong Digital Growth Continues: Digital revenue achieved double-digit growth for the third consecutive quarter, offsetting distribution revenue stagnation at $370M amid subscriber declines.
  • AI Automation and Cost Efficiency: AI implementation in transcription/video editing and "stations of the future" technology reduced CapEx by 80% and operating expenses by 50%.
  • Revised Guidance and Outlook: Adjusted free cash flow guidance reaffirmed at $900M–$1.1B, with 2025 interest expense lowered to $160M–$165M, despite Q3 revenue expected to drop 18–20%.

Distribution Revenue Flat, Subscriber Trends

Distribution revenue remained flat at $370 million, attributable to subscriber declines partially offset by contractual rate increases. The company successfully renewed a portion of its traditional MVPD subscribers and secured a multiyear agreement with FOX Corporation for six markets. This suggests a focus on strengthening its core cable distribution business while navigating the ongoing cord-cutting trend.

Optimistic Outlook Despite Third-Quarter Challenges

TEGNA anticipates a 18% to 20% decline in total company revenue in the third quarter, primarily due to the cyclical nature of the business. However, they expect non-GAAP operating expenses to decline 2% to 3% year-over-year. They also project low double-digit to mid-teen year-over-year growth in core advertising revenue for the third quarter, despite a challenging macroeconomic environment.

AI-Powered Efficiency and Growth Opportunities

TEGNA is actively investing in internal growth opportunities, including local journalism, content, digital development, and employee training. "We are using AI to help us be more efficient," CEO Dave Lougee stated on the earnings call, "from things like transcription and video editing to identifying new story leads." This focus on leveraging technology for both cost savings and content creation positions the company for long-term success in a rapidly evolving media landscape.

M&A Strategy and Valuation

TEGNA remains open to both M&A opportunities as a buyer and seller, but emphasizes a disciplined approach. This suggests a prudent approach to capital allocation, focusing on strategic acquisitions that create shareholder value. From a valuation standpoint, TEGNA trades at a P/E ratio of 5.27, P/B ratio of 0.81, and a free cash flow yield of 23.73%. These metrics indicate that the market is pricing in significant growth potential and a high degree of risk.

3. NewsRoom

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Market Today: Deal Talks, Retail Wins, AI Chips, and Crypto Volatility

Dec -02

Source: gurufocus.com

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Broadcast station owners want to consolidate. They're struggling to get deals to the finish line

Dec -02

Source: cnbc.com

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Commonwealth of Pennsylvania Public School Empls Retrmt SYS Increases Stake in TEGNA Inc. $TGNA

Nov -25

Source: defenseworld.net

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TEGNA Inc. (NYSE:TGNA) Receives $19.75 Consensus Target Price from Analysts

Nov -25

Source: defenseworld.net

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Tegna falls 5% after Trump criticizes lifting local TV ownership cap

Nov -24

Source: reuters.com

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Here's why Nexstar's CEO thinks the FCC should change the rules to allow a merger with Tegna

Nov -19

Source: marketwatch.com

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TEGNA Announces Quarterly Dividend

Nov -18

Source: globenewswire.com

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Nexstar Seeks Approval of TEGNA Acquisition From Federal Communications Commission

Nov -18

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.46%)

6. Segments

Subscription

Expected Growth: 2%

TEGNA Inc.'s subscription growth is driven by increasing demand for premium content, expansion into new markets, and strategic acquisitions. The company's focus on digital transformation, including investments in over-the-top (OTT) platforms and targeted advertising, has also contributed to growth. Additionally, TEGNA's strong brand portfolio and commitment to quality journalism have helped attract and retain subscribers.

Advertising & Marketing Services

Expected Growth: 3%

TEGNA Inc.'s Advertising & Marketing Services segment growth is driven by increasing demand for digital marketing solutions, expansion of its marketing services offerings, and strategic acquisitions. Additionally, the company's focus on providing data-driven insights and targeted advertising solutions to local businesses is contributing to its growth.

Other

Expected Growth: 1%

TEGNA Inc.'s 'Other' segment growth is driven by increasing demand for its digital marketing services, expansion of its Premion OTT platform, and strategic acquisitions. Additionally, growth in e-commerce and digital advertising spend, coupled with the company's focus on innovation and customer engagement, contribute to its robust growth.

Political

Expected Growth: 4%

TEGNA Inc.'s Political segment growth is driven by increasing demand for political advertising, particularly in election years. The company's strong presence in key battleground states and its ability to offer targeted advertising solutions to political campaigns contribute to its growth. Additionally, TEGNA's investments in digital marketing and data analytics capabilities enhance its offerings, attracting more political advertisers and fueling growth.

7. Detailed Products

TEGNA Local

TEGNA Local is a platform that provides local news, sports, and entertainment content to audiences across the United States.

Premion

Premion is a premium over-the-top (OTT) video advertising platform that enables advertisers to reach their target audiences across multiple devices.

Verizon Digital Media Services

Verizon Digital Media Services is a suite of digital media solutions that enables content owners and distributors to deliver high-quality video content to various platforms.

TEGNA Attribution

TEGNA Attribution is a data analytics platform that helps advertisers measure the effectiveness of their advertising campaigns across multiple channels.

TEGNA Marketing Solutions

TEGNA Marketing Solutions is a suite of marketing services that helps businesses develop and execute targeted marketing campaigns across multiple channels.

8. TEGNA Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

TEGNA Inc. operates in a highly competitive industry, with many substitutes available to customers. However, the company's strong brand recognition and high-quality content help to mitigate the threat of substitutes.

Bargaining Power Of Customers

TEGNA Inc.'s customers have limited bargaining power due to the company's strong market position and the lack of alternative options.

Bargaining Power Of Suppliers

TEGNA Inc. relies on a diverse range of suppliers, which reduces the bargaining power of individual suppliers. However, the company's dependence on a few key suppliers for critical components increases the bargaining power of those suppliers.

Threat Of New Entrants

The threat of new entrants is high in the media industry, with low barriers to entry and the potential for new players to disrupt the market. TEGNA Inc. must continue to innovate and invest in new technologies to stay ahead of potential competitors.

Intensity Of Rivalry

The media industry is highly competitive, with many established players competing for market share. TEGNA Inc. must focus on differentiating itself through high-quality content and innovative products to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 53.28%
Debt Cost 6.47%
Equity Weight 46.72%
Equity Cost 6.47%
WACC 6.47%
Leverage 114.04%

11. Quality Control: TEGNA Inc. passed 4 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
Nexstar Media

A-Score: 7.3/10

Value: 7.0

Growth: 8.2

Quality: 7.6

Yield: 7.0

Momentum: 7.0

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
TEGNA

A-Score: 6.6/10

Value: 8.0

Growth: 5.8

Quality: 6.7

Yield: 5.0

Momentum: 9.0

Volatility: 5.0

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Omnicom Group

A-Score: 5.7/10

Value: 6.6

Growth: 4.2

Quality: 5.5

Yield: 8.0

Momentum: 2.0

Volatility: 7.7

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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

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Interpublic

A-Score: 5.3/10

Value: 5.5

Growth: 3.7

Quality: 4.6

Yield: 8.0

Momentum: 3.0

Volatility: 7.3

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Cogent Communications

A-Score: 4.1/10

Value: 5.2

Growth: 2.7

Quality: 2.1

Yield: 10.0

Momentum: 0.0

Volatility: 4.3

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

19.27$

Current Price

19.27$

Potential

-0.00%

Expected Cash-Flows