4 Broadcast Radio & TV Stocks to Buy From a Prospering Industry

Core Insights - The Zacks Broadcast Radio and Television industry is experiencing challenges due to cord-cutting, but companies like Netflix, Gray Media, Fox Corporation, and TEGNA are benefiting from increased digital content consumption and diverse offerings [1][2]. Industry Overview - The industry includes companies providing entertainment, sports, news, and musical content across various platforms, generating revenue through program sales, advertising, and subscriptions [2]. - There is a shift towards a variable cost model to enhance flexibility and reduce fixed costs amid evolving market dynamics [2]. Trends - Companies are diversifying content for OTT services to adapt to changing consumer preferences, which is expected to boost ad revenues [3]. - The rise in digital viewing is driving demand for tailored content, leveraging AI and machine learning for user engagement [4]. - The macroeconomic landscape, including high inflation and competition from tech companies, is impacting advertising budgets and revenue growth [5]. - The introduction of low-priced "skinny bundles" is changing revenue dynamics, potentially dampening top-line performance [6]. Performance Metrics - The industry ranks 41 in the Zacks Industry Rank, indicating it is in the top 17% of over 250 industries, with a positive earnings outlook [7][9]. - The industry has outperformed the broader Zacks Consumer Discretionary sector and the S&P 500, gaining 54.4% over the past year compared to 2% and 1.5% respectively [11]. - The current EV/EBITDA ratio for the industry is 15.35X, slightly above the S&P 500's 15.19X [14]. Company Highlights - Fox Corporation: Demonstrated strong financial momentum with a 20% revenue growth and record EBITDA of $781 million, while also expanding its audience share and attracting new advertisers [17][18]. - TEGNA: Focused on modernization and technology deployment, targeting $90-$100 million in annualized savings, with a strong balance sheet and digital transformation initiatives [22][24]. - Netflix: Achieved first-quarter revenues of $10.54 billion, up 12.5% year over year, with a growing subscriber base and ambitious revenue targets [27][28]. - Gray Media: Positioned to capitalize on market-leading stations and diversified revenue streams, with successful partnerships in local sports and a focus on reducing debt [31][35].