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Townsquare Media (TSQ)
NYSE:TSQ
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Townsquare Media
(NYSE:TSQ)
47Neutral
Positive Factors
Digital Business Growth
More than 50% of revenues and roughly 60% of profits in the quarter came from the company’s digital businesses.
Dividend and Capital Return
Management’s confidence in the trajectory of the business underlies the $0.79 annual dividend, which provides a 7.9% yield.
Improvement in DMS Segment
The company has returned to subscriber growth and sequential revenue growth, offering an array of products, including CRM services in addition to the presence offerings.
Negative Factors
Leverage Concerns
While leverage is elevated at 4.88x, management’s confidence in the trajectory of the business underlies the $0.79 annual dividend, which provides a 7.9% yield.
Townsquare Media (TSQ) vs. S&P 500 (SPY)
Market Cap
$123.96M
Dividend Yield10.27%
Average Volume (3M)61.83K
Price to Earnings (P/E)―
Beta (1Y)1.12
Revenue Growth-0.72%
EPS Growth67.36%
CountryUS
Employees2,049
SectorCommunication Services
Sector Strength74
IndustryAdvertising Agencies
Share Statistics
EPS (TTM)-1.15
Shares Outstanding14,803,902
10 Day Avg. Volume74,751
30 Day Avg. Volume61,831
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.29
Price to Cash Flow (P/CF)1.10
P/FCF Ratio0.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$18.00Price Target Upside134.07% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Townsquare Media Business Overview & Revenue Model
Company DescriptionTownsquare Media (TSQ) is a leading media and entertainment company that primarily operates in small and mid-sized markets across the United States. The company specializes in local radio broadcasting and digital media, offering a diverse range of content that includes music, news, and entertainment. Townsquare Media owns and operates numerous radio stations and also provides digital marketing services to local businesses through its Townsquare Interactive division. Additionally, it produces live events, enhancing its portfolio with experiential offerings.
How the Company Makes MoneyTownsquare Media generates revenue through a combination of traditional advertising and digital marketing services. Its radio broadcasting segment earns money from selling advertising space to local and national clients. The company also monetizes its digital properties by providing digital marketing and advertising solutions through Townsquare Interactive, which includes services such as website design, search engine optimization, and social media management for local businesses. Live events contribute to the company's earnings by selling tickets, sponsorships, and merchandise. Partnerships with other media and technology companies also play a role in enhancing its content distribution and advertising capabilities.
Townsquare Media Financial Statement Overview
Summary
Townsquare Media faces significant financial challenges, highlighted by declining revenues, volatile profitability, and a heavily leveraged balance sheet. While operating cash flows remain relatively strong, the negative equity position and inconsistent free cash flow generation pose substantial risks. The company needs to address its debt levels and improve profitability to stabilize its financial position.Income Statement
Townsquare Media's income statement reveals a challenging financial position. The company's revenue has declined over the years, with a notable drop from 2022 to 2023. The net profit margin has been inconsistent, swinging from positive to negative, indicating volatile profitability. Gross profit margin is not directly calculable as gross profit equals total revenue, but net income fluctuations suggest margin pressures. Recent EBIT and EBITDA margins have been weak, reflecting operational challenges.45
Neutral
Balance Sheet
The balance sheet shows significant leverage, with a negative stockholders' equity in the latest year, highlighting solvency challenges. The debt-to-equity ratio cannot be calculated due to negative equity, underscoring financial risk. The equity ratio is also negative, indicating the company is more debt-financed. Overall, the balance sheet signals financial instability and high leverage risk.30
Negative
Cash Flow
Cash flow statements offer some positive aspects, despite the overall financial struggles. The operating cash flow to net income ratio is favorable, suggesting good cash flow generation relative to reported earnings. However, free cash flow has been inconsistent, with recent declines. Financing activities have consistently been cash outflows, impacting liquidity. The cash flow analysis indicates moderate performance with room for improvement.55
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 447.95M | 450.98M | 454.23M | 463.08M | 417.96M | 371.34M | Gross Profit |
| 103.20M | 450.98M | 125.03M | 138.15M | 129.66M | 88.99M | EBIT |
| 55.97M | 21.69M | -19.14M | 88.83M | 74.48M | 40.73M | EBITDA |
| 17.70M | 41.36M | 9.01M | 72.70M | 101.39M | -60.44M | Net Income Common Stockholders |
| -39.11M | 0.00 | -44.96M | 12.34M | 16.74M | -80.55M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 22.30M | 32.99M | 61.05M | 43.42M | 50.51M | 83.23M | Total Assets |
| 0.00 | 580.41M | 652.05M | 744.52M | 726.31M | 768.50M | Total Debt |
| 0.00 | 53.20M | 552.00M | 578.56M | 587.66M | 595.80M | Net Debt |
| 22.30M | 20.21M | 490.95M | 535.14M | 537.15M | 512.57M | Total Liabilities |
| 0.00 | 608.86M | 642.14M | 675.44M | 676.73M | 667.75M | Stockholders Equity |
| 208.34M | -28.44M | 6.41M | 65.52M | 46.26M | 97.26M |
| Cash Flow | Free Cash Flow | ||||
| 32.04M | 31.31M | 52.85M | 29.36M | 48.72M | 16.30M | Operating Cash Flow |
| 49.42M | 48.75M | 67.83M | 50.19M | 61.14M | 31.49M | Investing Cash Flow |
| -10.78M | -9.93M | -3.57M | -37.76M | -10.64M | -14.04M | Financing Cash Flow |
| -54.81M | -67.38M | -46.62M | -19.51M | -83.23M | -18.89M |
Townsquare Media Technical Analysis
Negative
7.69
Price Trends
8.49
Negative
9.02
Negative
9.57
Negative
Market Momentum
-0.11
Negative
42.45
Neutral
45.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSQ, the sentiment is Negative. The current price of 7.69 is below the 20-day moving average (MA) of 8.00, below the 50-day MA of 8.49, and below the 200-day MA of 9.57, indicating a bearish trend. The MACD of -0.11 indicates Negative momentum. The RSI at 42.45 is Neutral, neither overbought nor oversold. The STOCH value of 45.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSQ.
Townsquare Media Risk Analysis
Townsquare Media disclosed 33 risk factors in its most recent earnings report. Townsquare Media reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Townsquare Media Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $431.02M | 1.16 | 13.50% | 8.18% | 11.06% | ― | |
59 Neutral | $27.83B | 1.88 | -18.16% | 4.00% | 2.13% | -44.45% | |
49 Neutral | $7.16B | ― | -37.33% | 5.07% | -2.84% | -249.80% | |
47 Neutral | $123.96M | ― | 74.55% | 10.27% | -0.72% | 67.36% | |
42 Neutral | $189.48M | ― | 86.54% | ― | 2.76% | 9.71% | |
39 Underperform | $19.94M | ― | -193.00% | ― | -2.07% | -138.25% |
* Communication Services Sector Average
Performance Comparison
TSQ
Townsquare Media
7.69
-4.16
-35.11%
CMLS
Cumulus Media
0.40
-2.70
-87.10%
GTN
Gray Television
3.64
-1.91
-34.41%
SIRI
Sirius XM Holdings
19.51
-14.09
-41.93%
IHRT
iHeartMedia
1.20
-0.85
-41.46%
Townsquare Media Earnings Call Summary
Earnings Call Date: Mar 17, 2025 | % Change Since: -1.28% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call presented a generally positive outlook for Townsquare Media with significant achievements in digital revenue growth, a successful refinancing effort, and an increased dividend. However, challenges remain in the declining broadcast revenue and increased interest expenses due to refinancing. The company is optimistic about its digital strategy and cash flow generation capabilities.Highlights
Digital Revenue Growth
Digital revenue contributed 52% of total net revenue and 50% of total segment profit in 2024. Digital Advertising net revenue increased by 5.5% year-over-year to $159 million, growing to 35% of total company net revenue.
Townsquare Interactive Turnaround
Townsquare Interactive returned to year-over-year revenue growth in Q4 2024 and is expected to see segment profit growth in Q1 2025 for the first time in two years, with a projected increase of $2 million to $3 million for the full year.
Successful Refinancing
Completed a refinancing of debt to extend maturities until 2030, which is expected to manage the company's leverage more effectively despite an increase in annual interest expense.
Increased Dividend
Board approved an increase to the dividend by 1.3% year-over-year, now $0.80 per share on an annualized basis, representing a yield of approximately 10%.
Cash Flow Generation
Generated $49 million of cash flow from operations in 2024 and ended the year with $33 million in cash. Repurchased approximately $24 million worth of shares.
Lowlights
Broadcast Revenue Decline
Broadcast Advertising net revenue declined by 1% year-over-year in 2024, with expectations that it will continue to decline as businesses shift from traditional to digital advertising.
Interest Expense Increase
Annual interest expense increased by approximately $9 million due to refinancing, although this delta is expected to decline with future debt paydown.
Company Guidance
During Townsquare Media's Fourth Quarter 2024 Conference Call, the company provided a detailed financial update, highlighting that their results met previously issued guidance. Townsquare ended 2024 with $33 million in cash and generated $49 million in cash flow from operations. Their Digital Advertising revenue increased by 5.5% year-over-year to $159 million, accounting for 35% of the company's total net revenue, while Digital revenue overall contributed 52% of the total net revenue and 50% of the total segment profit. The Digital Programmatic business was emphasized as a major growth driver, particularly with new third-party media partnerships. Townsquare Interactive, their Subscription-based Digital Marketing Solutions SaaS business, returned to revenue growth in Q4 with a 2% increase year-over-year and expects a further increase in Q1 2025. The company successfully refinanced its debt, extending maturities to 2030, and increased its dividend by 1.3% year-over-year. Guidance for 2025 anticipates net revenue of $435 million to $455 million, with adjusted EBITDA between $90 million and $98 million.Townsquare Media Corporate Events
Private Placements and Financing
Townsquare Media Secures $490 Million Credit Agreement
Positive
Feb 24, 2025
On February 19, 2025, Townsquare Media, Inc. entered into a $490 million credit agreement with Bank of America, N.A., which includes a $470 million senior secured term loan facility and a $20 million revolving credit facility. The company used approximately $453 million of the net proceeds to redeem all outstanding 6.875% senior secured notes due 2026, thereby restructuring its debt and potentially improving its financial flexibility.
Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Townsquare Media Reports Strong Digital Growth for 2024
Positive
Jan 21, 2025
On January 21, 2025, Townsquare Media, Inc. announced preliminary estimated financial results for the fourth quarter and full year ended December 31, 2024. The company expects its full-year net revenue to be between $450 million and $452 million, and Adjusted EBITDA to be approximately $100 million. Townsquare’s digital divisions, particularly digital advertising, demonstrated strong growth, contributing to the company’s evolving strategy as a Digital First Local Media Company. Additionally, Townsquare expanded its Media Partnerships division, furthering partnerships to enhance their digital advertising solutions. The company repurchased $12 million of Senior Secured Notes in Q4, ending the year with $467 million of debt and $33 million of cash on hand, underscoring a positive outlook for sustainable growth.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.