Intrinsic value of Nexstar Media Group Cl A - NXST

Previous Close

$61.25

  Intrinsic Value

$653.81

stock screener

  Rating & Target

str. buy

+967%

Previous close

$61.25

 
Intrinsic value

$653.81

 
Up/down potential

+967%

 
Rating

str. buy

We calculate the intrinsic value of NXST stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  23.10
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  1,103
  1,765
  2,727
  4,078
  5,916
  8,347
  11,476
  15,404
  20,226
  26,026
  32,873
  40,820
  49,907
  60,155
  71,572
  84,156
  97,894
  112,765
  128,747
  145,813
  163,937
  183,096
  203,269
  224,442
  246,605
  269,754
  293,893
  319,031
  345,186
  372,382
  400,647
Variable operating expenses, $m
 
  1,045
  1,588
  2,352
  3,391
  4,764
  6,532
  8,752
  11,477
  14,755
  18,624
  23,068
  28,203
  33,994
  40,447
  47,558
  55,321
  63,726
  72,757
  82,401
  92,643
  103,470
  114,871
  126,836
  139,361
  152,443
  166,084
  180,290
  195,071
  210,439
  226,413
Fixed operating expenses, $m
 
  153
  157
  160
  164
  169
  173
  177
  182
  186
  191
  196
  200
  205
  211
  216
  221
  227
  232
  238
  244
  250
  257
  263
  270
  276
  283
  290
  297
  305
  313
Total operating expenses, $m
  816
  1,198
  1,745
  2,512
  3,555
  4,933
  6,705
  8,929
  11,659
  14,941
  18,815
  23,264
  28,403
  34,199
  40,658
  47,774
  55,542
  63,953
  72,989
  82,639
  92,887
  103,720
  115,128
  127,099
  139,631
  152,719
  166,367
  180,580
  195,368
  210,744
  226,726
Operating income, $m
  287
  567
  982
  1,566
  2,361
  3,414
  4,770
  6,474
  8,567
  11,085
  14,058
  17,557
  21,503
  25,955
  30,915
  36,382
  42,351
  48,813
  55,758
  63,173
  71,049
  79,375
  88,142
  97,343
  106,975
  117,035
  127,526
  138,451
  149,818
  161,638
  173,922
EBITDA, $m
  407
  750
  1,238
  1,925
  2,862
  4,101
  5,697
  7,702
  10,164
  13,127
  16,624
  20,685
  25,328
  30,565
  36,400
  42,832
  49,854
  57,456
  65,625
  74,349
  83,614
  93,408
  103,721
  114,545
  125,875
  137,710
  150,050
  162,902
  176,274
  190,177
  204,628
Interest expense (income), $m
  100
  120
  193
  310
  475
  700
  997
  1,379
  1,859
  2,449
  3,157
  3,994
  4,965
  6,076
  7,328
  8,723
  10,261
  11,939
  13,756
  15,709
  17,795
  20,009
  22,350
  24,815
  27,403
  30,111
  32,939
  35,889
  38,961
  42,157
  45,480
Earnings before tax, $m
  171
  447
  789
  1,255
  1,886
  2,714
  3,773
  5,095
  6,708
  8,636
  10,900
  13,563
  16,538
  19,879
  23,587
  27,659
  32,091
  36,874
  42,001
  47,464
  53,255
  59,366
  65,792
  72,528
  79,572
  86,925
  94,587
  102,562
  110,858
  119,481
  128,443
Tax expense, $m
  78
  121
  213
  339
  509
  733
  1,019
  1,376
  1,811
  2,332
  2,943
  3,662
  4,465
  5,367
  6,369
  7,468
  8,664
  9,956
  11,340
  12,815
  14,379
  16,029
  17,764
  19,583
  21,485
  23,470
  25,538
  27,692
  29,932
  32,260
  34,679
Net income, $m
  92
  326
  576
  916
  1,377
  1,981
  2,754
  3,719
  4,897
  6,304
  7,957
  9,901
  12,073
  14,512
  17,219
  20,191
  23,426
  26,918
  30,661
  34,649
  38,876
  43,337
  48,028
  52,945
  58,088
  63,455
  69,048
  74,870
  80,926
  87,221
  93,763

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  88
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  2,966
  4,608
  7,119
  10,647
  15,448
  21,794
  29,962
  40,218
  52,809
  67,953
  85,830
  106,581
  130,305
  157,062
  186,872
  219,729
  255,597
  294,427
  336,154
  380,712
  428,033
  478,057
  530,729
  586,011
  643,877
  704,319
  767,345
  832,980
  901,270
  972,276
  1,046,077
Adjusted assets (=assets-cash), $m
  2,878
  4,608
  7,119
  10,647
  15,448
  21,794
  29,962
  40,218
  52,809
  67,953
  85,830
  106,581
  130,305
  157,062
  186,872
  219,729
  255,597
  294,427
  336,154
  380,712
  428,033
  478,057
  530,729
  586,011
  643,877
  704,319
  767,345
  832,980
  901,270
  972,276
  1,046,077
Revenue / Adjusted assets
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
Average production assets, $m
  1,107
  1,772
  2,738
  4,094
  5,940
  8,381
  11,521
  15,465
  20,307
  26,130
  33,004
  40,984
  50,107
  60,395
  71,858
  84,493
  98,285
  113,217
  129,262
  146,396
  164,593
  183,828
  204,082
  225,340
  247,591
  270,833
  295,069
  320,308
  346,567
  373,871
  402,250
Working capital, $m
  173
  208
  322
  481
  698
  985
  1,354
  1,818
  2,387
  3,071
  3,879
  4,817
  5,889
  7,098
  8,446
  9,930
  11,551
  13,306
  15,192
  17,206
  19,345
  21,605
  23,986
  26,484
  29,099
  31,831
  34,679
  37,646
  40,732
  43,941
  47,276
Total debt, $m
  2,359
  3,709
  5,969
  9,144
  13,465
  19,177
  26,528
  35,758
  47,090
  60,719
  76,809
  95,485
  116,837
  140,918
  167,747
  197,318
  229,600
  264,546
  302,101
  342,203
  384,792
  429,813
  477,218
  526,972
  579,052
  633,449
  690,172
  749,244
  810,705
  874,610
  941,031
Total liabilities, $m
  2,797
  4,147
  6,407
  9,582
  13,903
  19,615
  26,966
  36,196
  47,528
  61,157
  77,247
  95,923
  117,275
  141,356
  168,185
  197,756
  230,038
  264,984
  302,539
  342,641
  385,230
  430,251
  477,656
  527,410
  579,490
  633,887
  690,610
  749,682
  811,143
  875,048
  941,469
Total equity, $m
  169
  461
  712
  1,065
  1,545
  2,179
  2,996
  4,022
  5,281
  6,795
  8,583
  10,658
  13,031
  15,706
  18,687
  21,973
  25,560
  29,443
  33,615
  38,071
  42,803
  47,806
  53,073
  58,601
  64,388
  70,432
  76,734
  83,298
  90,127
  97,228
  104,608
Total liabilities and equity, $m
  2,966
  4,608
  7,119
  10,647
  15,448
  21,794
  29,962
  40,218
  52,809
  67,952
  85,830
  106,581
  130,306
  157,062
  186,872
  219,729
  255,598
  294,427
  336,154
  380,712
  428,033
  478,057
  530,729
  586,011
  643,878
  704,319
  767,344
  832,980
  901,270
  972,276
  1,046,077
Debt-to-equity ratio
  13.959
  8.050
  8.380
  8.590
  8.720
  8.800
  8.850
  8.890
  8.920
  8.940
  8.950
  8.960
  8.970
  8.970
  8.980
  8.980
  8.980
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  9.000
  9.000
  9.000
Adjusted equity ratio
  0.028
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  92
  326
  576
  916
  1,377
  1,981
  2,754
  3,719
  4,897
  6,304
  7,957
  9,901
  12,073
  14,512
  17,219
  20,191
  23,426
  26,918
  30,661
  34,649
  38,876
  43,337
  48,028
  52,945
  58,088
  63,455
  69,048
  74,870
  80,926
  87,221
  93,763
Depreciation, amort., depletion, $m
  120
  183
  256
  360
  501
  687
  927
  1,228
  1,597
  2,042
  2,567
  3,129
  3,825
  4,610
  5,485
  6,450
  7,503
  8,642
  9,867
  11,175
  12,564
  14,033
  15,579
  17,202
  18,900
  20,674
  22,524
  24,451
  26,456
  28,540
  30,706
Funds from operations, $m
  226
  509
  832
  1,276
  1,877
  2,668
  3,681
  4,947
  6,494
  8,346
  10,524
  13,029
  15,898
  19,122
  22,704
  26,641
  30,929
  35,560
  40,528
  45,824
  51,440
  57,370
  63,607
  70,147
  76,988
  84,129
  91,573
  99,321
  107,382
  115,761
  124,469
Change in working capital, $m
  -22
  78
  113
  159
  217
  287
  369
  464
  569
  684
  808
  938
  1,072
  1,209
  1,347
  1,485
  1,621
  1,755
  1,886
  2,014
  2,139
  2,261
  2,380
  2,498
  2,615
  2,732
  2,848
  2,966
  3,086
  3,209
  3,335
Cash from operations, $m
  248
  431
  719
  1,117
  1,660
  2,381
  3,312
  4,484
  5,925
  7,662
  9,716
  12,091
  14,826
  17,913
  21,357
  25,156
  29,308
  33,806
  38,642
  43,810
  49,302
  55,109
  61,226
  67,648
  74,373
  81,398
  88,724
  96,355
  104,295
  112,552
  121,134
Maintenance CAPEX, $m
  0
  -85
  -135
  -209
  -313
  -453
  -640
  -880
  -1,181
  -1,550
  -1,995
  -2,519
  -3,129
  -3,825
  -4,610
  -5,485
  -6,450
  -7,503
  -8,642
  -9,867
  -11,175
  -12,564
  -14,033
  -15,579
  -17,202
  -18,900
  -20,674
  -22,524
  -24,451
  -26,456
  -28,540
New CAPEX, $m
  -136
  -665
  -966
  -1,356
  -1,846
  -2,441
  -3,141
  -3,944
  -4,842
  -5,823
  -6,874
  -7,980
  -9,123
  -10,289
  -11,463
  -12,634
  -13,793
  -14,931
  -16,046
  -17,134
  -18,197
  -19,235
  -20,254
  -21,258
  -22,251
  -23,242
  -24,235
  -25,239
  -26,260
  -27,304
  -28,379
Cash from investing activities, $m
  -140
  -750
  -1,101
  -1,565
  -2,159
  -2,894
  -3,781
  -4,824
  -6,023
  -7,373
  -8,869
  -10,499
  -12,252
  -14,114
  -16,073
  -18,119
  -20,243
  -22,434
  -24,688
  -27,001
  -29,372
  -31,799
  -34,287
  -36,837
  -39,453
  -42,142
  -44,909
  -47,763
  -50,711
  -53,760
  -56,919
Free cash flow, $m
  108
  -318
  -382
  -449
  -498
  -513
  -468
  -340
  -97
  289
  847
  1,592
  2,574
  3,799
  5,283
  7,037
  9,065
  11,372
  13,954
  16,809
  19,930
  23,309
  26,939
  30,812
  34,920
  39,256
  43,815
  48,592
  53,585
  58,792
  64,215
Issuance/(repayment) of debt, $m
  -25
  1,395
  2,260
  3,175
  4,321
  5,712
  7,351
  9,230
  11,332
  13,629
  16,089
  18,676
  21,352
  24,081
  26,830
  29,571
  32,282
  34,946
  37,555
  40,102
  42,589
  45,021
  47,405
  49,754
  52,080
  54,398
  56,723
  59,072
  61,461
  63,905
  66,421
Issuance/(repurchase) of shares, $m
  1
  8
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -34
  1,403
  2,260
  3,175
  4,321
  5,712
  7,351
  9,230
  11,332
  13,629
  16,089
  18,676
  21,352
  24,081
  26,830
  29,571
  32,282
  34,946
  37,555
  40,102
  42,589
  45,021
  47,405
  49,754
  52,080
  54,398
  56,723
  59,072
  61,461
  63,905
  66,421
Total cash flow (excl. dividends), $m
  73
  1,085
  1,878
  2,726
  3,823
  5,200
  6,883
  8,891
  11,235
  13,918
  16,936
  20,269
  23,926
  27,880
  32,113
  36,607
  41,347
  46,318
  51,509
  56,911
  62,519
  68,330
  74,344
  80,566
  86,999
  93,653
  100,538
  107,664
  115,045
  122,697
  130,636
Retained Cash Flow (-), $m
  -88
  -335
  -251
  -353
  -480
  -635
  -817
  -1,026
  -1,259
  -1,514
  -1,788
  -2,075
  -2,372
  -2,676
  -2,981
  -3,286
  -3,587
  -3,883
  -4,173
  -4,456
  -4,732
  -5,002
  -5,267
  -5,528
  -5,787
  -6,044
  -6,303
  -6,564
  -6,829
  -7,101
  -7,380
Prev. year cash balance distribution, $m
 
  43
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  793
  1,627
  2,373
  3,343
  4,565
  6,066
  7,865
  9,976
  12,403
  15,149
  18,193
  21,554
  25,205
  29,132
  33,322
  37,760
  42,435
  47,336
  52,455
  57,787
  63,328
  69,077
  75,038
  81,213
  87,609
  94,235
  101,100
  108,216
  115,597
  123,256
Discount rate, %
 
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.18
  22.23
  23.35
  24.51
  25.74
  27.03
  28.38
  29.80
  31.29
  32.85
  34.49
  36.22
  38.03
  39.93
  41.93
  44.02
  46.22
  48.53
  50.96
  53.51
PV of cash for distribution, $m
 
  702
  1,260
  1,588
  1,908
  2,192
  2,415
  2,556
  2,602
  2,552
  2,413
  2,200
  1,937
  1,648
  1,353
  1,073
  822
  607
  433
  298
  197
  126
  77
  45
  26
  14
  7
  4
  2
  1
  0
Current shareholders' claim on cash, %
  100
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3

Nexstar Media Group, Inc., formerly Nexstar Broadcasting Group, Inc., is a television broadcasting and digital media company. The Company is focused on the acquisition, development and operation of television stations and interactive community Websites, and digital media services in medium-sized markets in the United States. The Company's segments include Broadcasting and Other. The Company's broadcast segment includes television stations and related community-focused Websites that it owns, operates, programs or provides sales and other services to in various markets across the United States. The other activities of the Company include corporate functions, eliminations and other operations. As of December 31, 2016, it owned, operated, programmed or provided sales and other services to 104 full power television stations in 62 markets in the states of Alabama, Arizona, Arkansas, California, Colorado, Florida, New York, Utah, Vermont, Virginia, West Virginia and Wisconsin, among others.

FINANCIAL RATIOS  of  Nexstar Media Group Cl A (NXST)

Valuation Ratios
P/E Ratio 20.5
Price to Sales 1.7
Price to Book 11.1
Price to Tangible Book
Price to Cash Flow 7.6
Price to Free Cash Flow 16.8
Growth Rates
Sales Growth Rate 23.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -73.1%
Cap. Spend. - 3 Yr. Gr. Rate -11.3%
Financial Strength
Quick Ratio 2
Current Ratio 0.2
LT Debt to Equity 1369.2%
Total Debt to Equity 1395.9%
Interest Coverage 3
Management Effectiveness
Return On Assets 6.1%
Ret/ On Assets - 3 Yr. Avg. 7.1%
Return On Total Capital 4.5%
Ret/ On T. Cap. - 3 Yr. Avg. 5.2%
Return On Equity 73.6%
Return On Equity - 3 Yr. Avg. 171.7%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 66.4%
Gross Margin - 3 Yr. Avg. 67.7%
EBITDA Margin 35.4%
EBITDA Margin - 3 Yr. Avg. 36.2%
Operating Margin 26%
Oper. Margin - 3 Yr. Avg. 25.5%
Pre-Tax Margin 15.5%
Pre-Tax Margin - 3 Yr. Avg. 15.7%
Net Profit Margin 8.3%
Net Profit Margin - 3 Yr. Avg. 9.1%
Effective Tax Rate 45.6%
Eff/ Tax Rate - 3 Yr. Avg. 42.1%
Payout Ratio 31.5%

NXST stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NXST stock intrinsic value calculation we used $1103 million for the last fiscal year's total revenue generated by Nexstar Media Group Cl A. The default revenue input number comes from 2016 income statement of Nexstar Media Group Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our NXST stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 13%, whose default value for NXST is calculated based on our internal credit rating of Nexstar Media Group Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Nexstar Media Group Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of NXST stock the variable cost ratio is equal to 60.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $149 million in the base year in the intrinsic value calculation for NXST stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.2% for Nexstar Media Group Cl A.

Corporate tax rate of 27% is the nominal tax rate for Nexstar Media Group Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the NXST stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for NXST are equal to 100.4%.

Life of production assets of 13.1 years is the average useful life of capital assets used in Nexstar Media Group Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for NXST is equal to 11.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $169 million for Nexstar Media Group Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 47.184 million for Nexstar Media Group Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Nexstar Media Group Cl A at the current share price and the inputted number of shares is $2.9 billion.

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COMPANY NEWS

▶ Local TV station to launch new newscast   [Aug-17-17 04:15PM  American City Business Journals]
▶ Nexstar beats Street 2Q forecasts   [Aug-08-17 05:26PM  Associated Press]
▶ REPEAT/Gabelli & Companys Broadcasting Symposium   [Aug-02-17 07:00AM  Business Wire]
▶ Gabelli & Companys Broadcasting Symposium   [07:00AM  Business Wire]
▶ Nexstar beats Street 1Q forecasts   [10:25AM  Associated Press]
▶ [$$] Possible Bidding War Emerges for Tribune Media   [12:09AM  The Wall Street Journal]
▶ [$$] Possible Bidding War Emerges for Tribune Media   [Apr-30-17 11:39PM  The Wall Street Journal]
▶ Possible Bidding War Emerges for Tribune Media   [11:39PM  The Wall Street Journal]
▶ Muse John R Buys Nexstar Media Group, Sells Media General   [Apr-28-17 07:38PM  GuruFocus.com]
▶ Raleigh TV station changing channels after FCC auction   [Apr-18-17 02:33PM  American City Business Journals]
▶ [$$] FCC to Vote on Relaxing Obama-Era Rule on TV Ownership   [Mar-29-17 06:15PM  at The Wall Street Journal]
Financial statements of NXST
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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