Gray Television’s (NYSE:GTN) Q1 Sales Top Estimates

GTN Cover Image — Gray Television’s (NYSE:GTN) Q1 Sales Top Estimates

Max Juang

Thu, May 8, 2025, 4:13 AM 4 min read

Revenue: $782 million vs analyst estimates of $773.2 million (5% year-on-year decline, 1.1% beat)
EPS (GAAP): -$0.23 vs analyst estimates of -$0.49 (52.6% beat)
Adjusted EBITDA: $160 million vs analyst estimates of $140.8 million (20.5% margin, 13.6% beat)
Operating Margin: 11.8%, down from 15.1% in the same quarter last year
Free Cash Flow Margin: 18.2%, up from 4.2% in the same quarter last year
Market Capitalization: $408 million

Company Overview

Specializing in local media coverage, Gray Television (NYSE:GTN) is a broadcast company supplying digital media to various markets in the United States.

Sales Growth

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Gray Television grew its sales at a 11% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Gray Television’s recent performance shows its demand has slowed as its revenue was flat over the last two years.

Gray Television Year-On-Year Revenue Growth

We can better understand the company’s revenue dynamics by analyzing its most important segments, Retransmission and Advertising, which are 48.5% and 44% of revenue. Over the last two years, Gray Television’s Retransmission (affiliate and licensing fees) and Advertising (marketing services) revenues were flat.

This quarter, Gray Television’s revenue fell by 5% year on year to $782 million but beat Wall Street’s estimates by 1.1%.

Looking ahead, sell-side analysts expect revenue to decline by 10.9% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and suggests its products and services will face some demand challenges.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

Operating Margin

Gray Television’s operating margin has risen over the last 12 months and averaged 18.2% over the last two years. On top of that, its profitability was top-notch for a consumer discretionary business, showing it’s an well-run company with an efficient cost structure.

In Q1, Gray Television generated an operating profit margin of 11.8%, down 3.3 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Gray Television’s EPS grew at an unimpressive 3.1% compounded annual growth rate over the last five years, lower than its 11% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.

Gray Television Trailing 12-Month EPS (GAAP)

In Q1, Gray Television reported EPS at negative $0.23, down from $0.79 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Gray Television to perform poorly. Analysts forecast its full-year EPS of $2.31 will invert to negative negative $0.63.

Key Takeaways from Gray Television’s Q1 Results

We were impressed by how significantly Gray Television blew past analysts’ EPS expectations this quarter. We were also glad its EBITDA outperformed Wall Street’s estimates. On the other hand, its Retransmission revenue missed. Zooming out, we think this was a mixed print. Investors were likely hoping for more, and shares traded down 1.2% to $3.67 immediately after reporting.

So do we think Gray Television is an attractive buy at the current price? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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