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GuruFocus has detected 5 Warning Signs with Nexstar Media Group Inc $NXST.
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Nexstar Media Group Inc (NAS:NXST)
Gross Profit
$877 Mil (TTM As of Mar. 2017)

Nexstar Media Group Inc's gross profit for the three months ended in Mar. 2017 was $322 Mil. Nexstar Media Group Inc's gross profit for the trailing twelve months (TTM) ended in Mar. 2017 was $877 Mil.

Gross Margin is calculated as gross profit divided by its revenue. Nexstar Media Group Inc's gross profit for the three months ended in Mar. 2017 was $322 Mil. Nexstar Media Group Inc's revenue for the three months ended in Mar. 2017 was $540 Mil. Therefore, Nexstar Media Group Inc's Gross Margin for the quarter that ended in Mar. 2017 was 59.52%.

Nexstar Media Group Inc had a gross margin of 59.52% for the quarter that ended in Mar. 2017 => Durable competitive advantage

During the past 13 years, the highest Gross Margin of Nexstar Media Group Inc was 75.76%. The lowest was 63.21%. And the median was 71.41%.

Warning Sign:

Nexstar Media Group Inc gross margin has been in long term decline. The average rate of decline per year is -2.8%.


Definition

Gross Profit is the different between the sale prices and the cost of buying or producing the goods.

Nexstar Media Group Inc's Gross Profit for the fiscal year that ended in Dec. 2016 is calculated as

Gross Profit (A: Dec. 2016 )=Revenue - Cost of Goods Sold
=1103.19 - 381.997
=721

Nexstar Media Group Inc's Gross Profit for the quarter that ended in Mar. 2017 is calculated as

Gross Profit (Q: Mar. 2017 )=Revenue - Cost of Goods Sold
=540.317 - 218.729
=322

Nexstar Media Group Inc Gross Profit for the trailing twelve months (TTM) ended in Mar. 2017 was 169.059 (Jun. 2016 ) + 174.915 (Sep. 2016 ) + 211.684 (Dec. 2016 ) + 321.588 (Mar. 2017 ) = $877 Mil.

Gross Profit is the numerator in the calculation of Gross Margin:

Nexstar Media Group Inc's Gross Margin for the quarter that ended in Mar. 2017 is calculated as

Gross Margin (Q: Mar. 2017 )=Gross Profit (Q: Mar. 2017 ) / Revenue (Q: Mar. 2017 )
=(Revenue - Cost of Goods Sold) / Revenue
=322 / 540.317
=59.52 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.


Explanation

Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.

Durable competitive advantage creates a high Gross Margin because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin

1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key

Nexstar Media Group Inc had a gross margin of 59.52% for the quarter that ended in Mar. 2017 => Durable competitive advantage


Related Terms

Cost of Goods Sold, Gross Margin, Revenue


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Nexstar Media Group Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Gross_Profit 193207175235225287355444594721

Nexstar Media Group Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Gross_Profit 141134146144170166169175212322
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