Is Nexstar Media Group (NXST) Pricing In Its Recent 56% One Year Share Price Jump?

• If you are wondering whether Nexstar Media Group's current share price reflects its true worth, you are not alone. This article is set up to help you unpack what the numbers might be saying.
• With the stock at US$231.18 after returns of 4.5% over 7 days, 8.8% over 30 days, 10.7% year to date and 56.4% over 1 year, plus 29.7% over 3 years and 117.1% over 5 years, many investors are asking what kind of value is now baked into the price.
• Recent coverage has focused on Nexstar Media Group's position as a large US media group and how its scale and assets fit into broader industry themes, giving investors additional context around the share price moves you are seeing. This backdrop matters because it shapes how the market may be framing both the opportunities and the risks attached to the stock today.
• Nexstar Media Group currently has a value score of 5/6, which reflects how many of our valuation checks indicate the shares may be undervalued. Next we will walk through the main valuation approaches used, then finish with a broader way to think about whether that score really captures the full picture.

Nexstar Media Group delivered 56.4% returns over the last year. See how this stacks up to the rest of the Media industry.

Approach 1: Nexstar Media Group Discounted Cash Flow (DCF) Analysis

A DCF model takes estimates of future cash flows, then discounts them back to today to arrive at an implied value per share. It is essentially asking what all of Nexstar Media Group’s future cash generation is worth in today’s dollars.

For Nexstar, the model uses a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The company’s latest twelve month Free Cash Flow stands at about $964.1 million. Analysts provide explicit forecasts out to 2029, with Simply Wall St extrapolating the later years. For example, projected Free Cash Flow for 2029 is $973 million, and the ten year projection set runs from $1,206.8 million in 2026 to $1,030.4 million in 2035, all in $ terms.

Discounting these future cash flows back to today gives an estimated intrinsic value of $573.63 per share. Compared with the recent share price of $231.18, the DCF output indicates the stock is 59.7% undervalued on this model.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Nexstar Media Group is undervalued by 59.7%. Track this in your watchlist or portfolio, or discover 55 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Nexstar Media Group.

Approach 2: Nexstar Media Group Price vs Earnings

For profitable companies like Nexstar Media Group, the P/E ratio is a useful shorthand for how much investors are currently paying for each dollar of earnings. It ties the share price directly to the business’s bottom line, which is usually what drives long term returns.

What counts as a “normal” or “fair” P/E depends on how the market sees a company’s growth prospects and risks. Higher expected growth or lower perceived risk can support a higher P/E, while slower growth or higher risk typically justifies a lower P/E.

Nexstar’s current P/E is 13.99x. That sits close to the broader Media industry average of 14.56x and below the peer group average of 24.69x. Simply Wall St also calculates a Fair Ratio of 19.64x, which reflects the P/E you might expect once factors like earnings growth, profit margin, size, industry and company specific risks are considered together.

This Fair Ratio can be more informative than a simple comparison with industry or peers because it adjusts for Nexstar’s own characteristics rather than assuming all media companies should trade on similar multiples. With the current P/E below the Fair Ratio, this approach indicates that Nexstar Media Group appears undervalued on an earnings basis.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Nexstar Media Group Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about Nexstar Media Group, tied directly to your assumptions for fair value, future revenue, earnings and margins, then compared with today’s share price. On Simply Wall St, Narratives live in the Community page and are used by millions of investors as an easy tool that links a company’s qualitative story to a structured forecast and an implied fair value that updates automatically when new information like earnings or deal news is released. For Nexstar, one investor might focus on trusted local news, digital expansion, political ad revenue and potential M&A benefits and end up closer to the higher US$250 fair value. Another might focus on pay TV pressure, debt and regulatory risk and land nearer the lower US$190 view. By comparing any Narrative’s fair value with the current price, you get a clearer framework for deciding whether Nexstar now looks closer to an opportunity or something to be cautious about, based on your own assumptions.

Do you think there's more to the story for Nexstar Media Group? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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