Gray Television (GTN) hits record high: is there still room to run?
Hhave you paid attention to the actions of Gray Television (GTN)? Stocks have been on the move with the stock rising 15.6% over the past month. The stock hit a new 52-week high of $ 23.94 in the previous session. Gray Television is up 31.7% year-to-date, compared to the 1.5% movement for the Zacks Consumer Discretionary segment and the 6.9% return for the Zacks Broadcast Radio and Television industry.
What drives outperformance?
The stock has an impressive track record of positive earnings surprises as it only missed our consensus earnings estimate over the past four quarters. In its latest earnings report on May 3, 2021, Gray Television reported EPS of $ 0.27 compared to a consensus estimate of $ 0.15, while beating the consensus revenue estimate by 2.4%.
For the current fiscal year, Gray Television is expected to post earnings of $ 1.79 per share on $ 2.25 billion in revenue. This represents a variation of -51.49% of EPS on a variation of -5.35% of income. For the next fiscal year, the company is expected to earn $ 3.85 per share on $ 2.59 billion in revenue. This represents a year-over-year variation of 115.27% and 14.77%, respectively.
Gray Television may be at a 52-week high right now, but what could the future hold for the action? A key aspect of this question is to look at the valuation metrics to determine whether the business should fall back from that level.
On this front, we can look at Zacks style scores, as they offer investors a variety of ways to browse stocks (beyond looking at the Zacks rank of a stock). These styles are represented by ratings ranging from A to F in the Value, Growth, and Momentum categories, while there is also a combined VGM score. Investors should view style scores as a valuable tool that can help you choose the most appropriate Zacks Rank stocks based on their individual investing style.
Gray Television has a value score of A. The stock’s growth and momentum scores are D and C respectively, giving the company a VGM score of B.
In terms of the distribution of value, the stock is currently trading at 13.2 times the current year’s EPS estimates. Based on the lower cash flow, the stock is currently trading at 3.1X against its peer group’s 7.2X average. Additionally, the stock has a PEG ratio of 1.32. This is not enough to put the company in the first rung of all the stocks we cover from a value perspective.
We also need to look at the Zacks leaderboard for action, as it overrides any trend on the style score front. Fortunately, Gray Television currently has a Zacks rank of # 2 (Buy) thanks to rising revenue estimates.
Given that we recommend that investors select stocks with the Zacks rank of 1 (strong buy) or 2 (buy) and style scores of A or B, it looks like Gray Television does the trick. So, it looks like Gray Television’s shares may have a bit more wiggle room in the near term.
How does gray television compare to the competition?
Gray Television shares have gone up and the company still seems like a decent choice, but what about the rest of the industry? Some of its industry peers also look good, including Entravision Communications (EVC), Townsquare Media (TSQ) and TEGNA (TGNA), all of which currently have a Zacks rank of at least # 2 and a VGM score of at least. minus B, which makes them well-balanced choices.
Zacks’ industry ranking is in the top 40% of all industries we have in our universe, so it looks like there are some nice tailwinds for Gray Television, even beyond its own fundamental situation. solid.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.