The E.W. Scripps Company (SSP, Financial) announced its first-quarter revenue at $524.4 million, a decrease from $561.5 million in the previous year. Despite this decline, the company surpassed its financial forecasts amid challenging economic conditions. The Scripps Networks division reported its most impressive margins since the fourth quarter of 2022, thanks to robust sales strategies and controlled expenses. Looking ahead, the return of women's sports is anticipated to bolster growth in the coming quarters.
In the past year, SSP has focused considerably on reducing its debt and leverage, marking it as a top priority for capital allocation. As the company progresses through the year's first half, it is addressing business uncertainties while striving to boost revenue in connected TV and sports. Additionally, SSP aims to capitalize on margin improvements within Scripps Networks and leverage potential benefits from changes in the regulatory landscape.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for The E W Scripps Co (SSP, Financial) is $5.45 with a high estimate of $10.00 and a low estimate of $1.00. The average target implies an upside of 110.42% from the current price of $2.59. More detailed estimate data can be found on the The E W Scripps Co (SSP) Forecast page.
Based on the consensus recommendation from 5 brokerage firms, The E W Scripps Co's (SSP, Financial) average brokerage recommendation is currently 2.8, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for The E W Scripps Co (SSP, Financial) in one year is $7.34, suggesting a upside of 183.4% from the current price of $2.59. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the The E W Scripps Co (SSP) Summary page.
SSP Key Business Developments
Release Date: March 12, 2025
- Leverage Ratio: Reduced to 4.8 times by the end of 2024, nearly a full turn below the end of 2023.
- Scripps Networks Division Margin Improvement: Improved by 400 to 600 basis points in 2024.
- Fourth Quarter Margin: Reported at 28% for Scripps Networks.
- Political Advertising Revenue: Record $343 million for full year 2024, with $174 million in Q4.
- Local Media Division Revenue: Increased 34% in Q4 2024 compared to the previous year.
- Core Advertising Revenue: Decreased 11% in Q4 2024 compared to Q4 2023.
- Local Media Segment Profit: Nearly $200 million in Q4 2024, up from $86 million in Q4 2023.
- Scripps Networks Revenue: $216 million in Q4 2024, down 6% from the previous year.
- Connected TV Revenue: Increased 16% in Q4 2024.
- Fourth Quarter Income Attributable to Shareholders: $80 million or $0.92 per share.
- Total Debt at Year-End: $2.6 billion.
- Cash and Cash Equivalents: $24 million at December 31, 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- The E W Scripps Co (SSP, Financial) reported strong fourth quarter and full year 2024 results, with significant progress in performance improvement for the Scripps Networks.
- The company successfully reduced its leverage ratio to 4.8 times by the end of the year, nearly a full turn below the end of 2023.
- Scripps achieved a record political advertising revenue, almost 30% higher than the 2020 presidential election year revenue.
- The refinancing of debt, including a two-year extension on the 2026 term loan and a one-year extension on a portion of the 2028 term loan, was completed at favorable economics.
- Scripps Networks division margins are expected to improve by 400 to 600 basis points in 2025, with aggressive expense management contributing to this improvement.
Negative Points
- Core advertising revenue was down 11% in the fourth quarter compared to Q4 2023, impacted by political advertising displacement.
- Local Media division revenue is expected to be down in the high single-digit range for the first quarter of 2025.
- Scripps Networks revenue was down 6% in the fourth quarter compared to the previous year, consistent with guidance.
- The company continues to face challenges from streaming services growing advertising inventory, impacting revenue.
- Automotive and retail advertising categories are experiencing significant declines, contributing to overall core advertising weakness.
