Townsquare Media, Inc. (TSQ) | Investment Case

1. Company Snapshot

1.a. Company Description

Townsquare Media, Inc.operates as a digital media and marketing solutions company in small and medium-sized businesses.It operates through three segments: Subscription Digital Marketing Solutions, Digital Advertising, and Broadcast Advertising.

The Subscription Digital Marketing Solutions segment offers various digital marketing solutions, including hosting, search engine optimization, online directory optimization, e-commerce solutions, online reputation monitoring, social media management, appointment scheduling, payment and invoice, customer management, email marketing, and website retargeting services, as well as traditional and mobile-enabled website design, creation, and development services.The Digital Advertising segment provides digital advertising on its owned and operated digital properties, and digital programmatic advertising platforms, as well as data analytics and management platform.The Broadcast Advertising segment engages in the sale of local radio stations to local, regional, and national spot advertisers, and national network advertisers.

As of December 31, 2021, this segment owned and operated 322 radio stations and approximately 330 local websites in 67 local markets.It also owns and operates approximately 200 live events, including concerts, expositions, and other experiential events; and operates local media under the WYRK.com, WJON.com, and NJ101.5.com brands, as well as national music under the XXLmag.com, TasteofCountry.com, UltimateClassicRock.com, and Loudwire.com brands.The company was formerly known as Regent Communications, Inc.

and changed its name to Townsquare Media, Inc.in May 2010.Townsquare Media, Inc.

was incorporated in 1996 and is headquartered in Purchase, New York.

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1.b. Last Insights on TSQ

Townsquare Media's recent performance was impacted by cautious Wall Street projections for its Q3 2025 earnings, with analysts scrutinizing key metrics to gauge potential performance. Despite being mentioned as a potential stock to more than double in value, the company's dividend yield is not highlighted as particularly "safer" compared to others. With no recent earnings release providing a clear beat or miss, investors are likely focusing on the company's upcoming conference call to discuss Q3 financial results, which may provide insight into its business conditions and growth prospects.

1.c. Company Highlights

Last Price	4.89
Change Percentage	0.00%
Open	4.88
Previous Close	4.89
Market Cap ( Millions)	78
Volume	45702
Year High	10.39
Year Low	4.3
M A 50	5.87
M A 200	6.99

FCF Yield	39.33%
Dividend Yield	16.31%
ROE	-57.61%
Debt / Equity	-186.85%
Net Debt / EBIDTA	83.93%
Price To Book	-2.35
Price Earnings Ratio	4.37
Price To FCF	2.54
Price To sales	0.18
EV / EBITDA	1.93

2. Townsquare Media's Q3 2025 Earnings: A Strong Digital Presence

Townsquare Media reported total net revenue of $106.8 million for Q3 2025, in line with the company's guidance range. Adjusted EBITDA was $22 million, also within the expected range. The company's earnings per share (EPS) came in at $0.05, matching analyst estimates. Digital revenue continued to drive the company's growth, making up 55% of total net revenue. The company's broadcast segment saw a decline in net revenue, but segment profit margins increased year-over-year to 28%.

Publication Date: Nov -12

                                    📋 Highlights
                                    Digital Revenue Dominance:
                                                Digital revenue accounted for 55% of total net revenue, doubling the industry average.
Ignite Segment Shift:
                                                Programmatic digital advertising (60% of Ignite revenue) grew high-single digits, offsetting 50% YoY remnant revenue decline.
Interactive Profit Surge:
                                                Townsquare Interactive achieved 21% YoY profit growth with 33% margins, projecting 30+ year-over-year margin retention.
Broadcast Margin Resilience:
                                                Broadcast profit margins rose to 28% despite 7.4% revenue decline, driven by cost optimization.
Cash Flow and Debt Reduction:
                                                Strong cash flow enabled $9M term loan repayment, reducing debt by $17M since February, with $2.3M annualized interest savings from rate cuts.

                                

Segment Performance

The digital advertising segment, Townsquare Ignite, experienced a slight revenue decline due to a 50% year-over-year drop in remnant indirect digital advertising revenue. However, direct sales of programmatic and owned and operated digital portfolio grew, with a 60% contribution from programmatic business. Townsquare Interactive delivered strong profit growth with a 21% year-over-year increase in segment profit and 33% profit margins.

Cash Flow and Debt

Townsquare's business model continues to generate strong cash flow from operations, which is being applied towards organic investment, debt paydown, and shareholder returns. The company repaid $9 million of its term loan in Q3, reducing its outstanding debt by $17 million since the February refinancing. The net leverage ratio is 4.71x, and the recent interest rate cuts are expected to result in an annualized interest reduction of $2.3 million.

Outlook and Valuation

The company expects full-year revenue to be between $426 million and $430 million, with adjusted EBITDA guidance between $88 million and $90 million. With a P/S Ratio of 0.2 and EV/EBITDA of 2.09, the market appears to be pricing in a relatively low growth trajectory. However, the company's digital media partnerships are expected to drive significant revenue growth in the future, with a potential top-line revenue of $50 million at a 20% margin over the next 5 years.

Growth Prospects

Analysts estimate next year's revenue growth at 3.2%. The company's strong cash flow generation and debt repayment capabilities are positives. The Dividend Yield of 14.63% and Free Cash Flow Yield of 34.26% are also attractive. However, the ROE of -57.61% is a concern, indicating that the company's net income is still negative. The ROIC of 24.15% is a positive, suggesting that the company's invested capital is generating returns.

3. NewsRoom

Exclusive Release of Trump Vodka Added to NobleCon21 Experiential Kickoff

Nov -26

Source: feeds.newsfilecorp.com

Townsquare to Participate in Upcoming Investor Conference

Nov -25

Source: globenewswire.com

Florida Lt. Governor Jay Collins and FAU President Adam Hasner to Open the NobleCon21 Kickoff Event

Nov -18

Source: feeds.newsfilecorp.com

Michael Dell's Strategic Shift: Significant Reduction in Hayward Holdings Inc.

Nov -14

Source: gurufocus.com

Townsquare Media, Inc. (TSQ) Q3 2025 Earnings Call Transcript

Nov -10

Source: seekingalpha.com

Compared to Estimates, Townsquare (TSQ) Q3 Earnings: A Look at Key Metrics

Nov -10

Source: zacks.com

Townsquare Media (TSQ) Matches Q3 Earnings Estimates

Nov -10

Source: zacks.com

Townsquare Reports Q3 Results

Nov -10

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.05%)

6. Segments

Broadcast Advertising

Expected Growth: 1.8%

Townsquare Media's 1.8% growth in Broadcast Advertising is driven by increasing demand for local advertising, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on digital integration and cross-platform selling is attracting new advertisers and increasing revenue per client. Furthermore, the shift towards experiential marketing and events is also contributing to the segment's growth.

Digital Advertising

Expected Growth: 2.2%

Townsquare Media's 2.2% growth in Digital Advertising is driven by increasing demand for digital marketing solutions, expansion into new markets, and strategic partnerships. Additionally, the company's focus on providing data-driven advertising solutions and its ability to leverage its radio broadcasting assets to cross-sell digital services have contributed to its growth.

Subscription Digital Marketing Solutions

Expected Growth: 2.5%

Townsquare Media's Subscription Digital Marketing Solutions growth is driven by increasing demand for digital marketing services, expansion into new markets, and strategic partnerships. The company's focus on providing data-driven solutions and its ability to help small and medium-sized businesses thrive in the digital landscape are key contributors to its 2.5% growth.

Other

Expected Growth: 1.5%

Townsquare Media's 1.5% growth in 'Other' segment is driven by increasing demand for digital marketing services, expansion of e-commerce offerings, and strategic partnerships. Additionally, the company's focus on experiential marketing and events has contributed to revenue growth. Furthermore, the company's cost-saving initiatives and operational efficiencies have also supported the segment's growth.

7. Detailed Products

Local Advertising

Townsquare Media offers local advertising solutions to help businesses reach their target audience through radio, digital, and event marketing.

Digital Marketing Services

Townsquare Media provides digital marketing services, including website design, search engine optimization, and social media management, to help businesses establish a strong online presence.

Live Events

Townsquare Media produces and promotes live events, such as concerts, festivals, and fairs, that bring communities together and provide unique sponsorship opportunities for brands.

National Advertising

Townsquare Media offers national advertising solutions, including network radio and digital advertising, to help brands reach a wider audience.

Content Creation

Townsquare Media creates engaging content, including podcasts, videos, and articles, that resonates with audiences and provides brands with unique sponsorship opportunities.

8. Townsquare Media, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Townsquare Media, Inc. operates in a niche market, providing digital marketing solutions to small and medium-sized businesses. While there are substitutes available, the company's focus on local markets and its diversified product offerings mitigate the threat of substitutes.

Bargaining Power Of Customers

Townsquare Media, Inc.'s customers are primarily small and medium-sized businesses, which have limited bargaining power. The company's diversified product offerings and local market focus also reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Townsquare Media, Inc. relies on a network of suppliers for its digital marketing solutions. While the company has some bargaining power due to its scale, suppliers may still exert some pressure on prices and terms.

Threat Of New Entrants

The digital marketing industry is highly competitive, and new entrants can easily enter the market. Townsquare Media, Inc. must continually innovate and differentiate its products to maintain its market position.

Intensity Of Rivalry

The digital marketing industry is highly competitive, with many established players and new entrants vying for market share. Townsquare Media, Inc. must focus on differentiating its products and services to maintain its market position.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	98.76%
Debt Cost	8.07%
Equity Weight	1.24%
Equity Cost	10.45%
WACC	8.10%
Leverage	7944.35%

11. Quality Control: Townsquare Media, Inc. passed 5 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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 ->

Steel Connect

A-Score: 5.6/10

Value: 9.3

Growth: 4.7

Quality: 6.6

Yield: 0.0

Momentum: 8.5

Volatility: 4.3

1-Year Total Return ->

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 ->

Emerald Holding

A-Score: 4.4/10

Value: 4.2

Growth: 2.9

Quality: 6.5

Yield: 1.0

Momentum: 7.0

Volatility: 4.7

1-Year Total Return ->

Inuvo

A-Score: 4.1/10

Value: 6.2

Growth: 3.9

Quality: 4.5

Yield: 0.0

Momentum: 9.0

Volatility: 1.0

1-Year Total Return ->

Harte Hanks

A-Score: 3.8/10

Value: 9.2

Growth: 1.1

Quality: 4.3

Yield: 0.0

Momentum: 5.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-3.53%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.10%

Townsquare Media, Inc. - US8922311019

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on TSQ

1.c. Company Highlights

Higher Yield

Cheaper

Lower Quality

Earnings Miss

Revenues Beats

Average Quality

Revenues Miss

Stable Momentum

Medium Volatility

Fairly Valued

Earnings Beats

Weak Momentum

2. Townsquare Media's Q3 2025 Earnings: A Strong Digital Presence

Segment Performance

Cash Flow and Debt

Outlook and Valuation

Growth Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.05%)

6. Segments

Broadcast Advertising

Expected Growth: 1.8%

Digital Advertising

Expected Growth: 2.2%

Subscription Digital Marketing Solutions

Expected Growth: 2.5%

Other

Expected Growth: 1.5%

7. Detailed Products

Local Advertising

Digital Marketing Services

Live Events

National Advertising

Content Creation

8. Townsquare Media, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Townsquare Media, 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

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.89$

Current Price

4.89$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA